Nieuwe 3-jaars obligatielening EIB erg in trek (en)

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  Largest 3-year syndicated EUR benchmark 2010-to-date
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  More than three times over-subscribed: Orders in excess of EUR 16 bn
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  Strong and diverse demand from central banks, official institutions, fund managers and insurers
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  Asian demand was a standout: 29%

The European Investment Bank today priced its first new EUR benchmark Euro Area Reference Note (EARN) of 2011. The issue carries an annual coupon of 2.125% and has a final maturity date of 15th January 2014, refreshing the current coupon liquid presence in the 3-year sector of the EIB’s EARNs curve. The bond was priced at a spread of mid-swaps minus 8bps - at the tight end of guidance of mid-swaps minus 6 to minus 8bps - equating to a spread of +59.5bps over the OBL 4% due October 2013.

This transaction has been designed as the result of careful preparation in close dialogue with key investors in this maturity segment. Central banks and official institutions drove demand for the transaction (44%), which offers investors the first 3-year EARN in almost two years.

The total order book exceeded EUR 16 billion, the largest orderbook of the EIB ever, and consisted of over 230 orders. Most orders were on a cash basis.

Composition of demand for the EARN issue:

With this transaction EIB’s funding programme has reached over EUR 16 billion year-to-date, against an annual programme of EUR 70-75 billion. With this transaction, total EUR-denominated benchmark outstandings have reached around EUR 113 billion across 21 EARNs.

Comments on the issue:

Barbara Bargagli-Petrucci, Director, Head of Capital Markets Department at the EIB, said: “The record scale of demand and the exceptional speed of bookbuilding emphasise the strength of EIB’s EARNs franchise and the timeliness of this issue.”

Nathaniel Timbrell-Whittle, Co-Head of SSA DCM at BNP Paribas, said: “The EIB has once again really hit the sweet spot in terms of current investor appetite for

short-dated premium quality assets and has been rewarded with a highly

successful €5 billion 3-year EARN transaction that priced at the tight end

of the price guidance. Textbook execution.”

Bill Northfield, Managing Director, Head of SSA Origination at Deutsche Bank, said: “With a lack of current coupon bonds available at the short end of the Euro curve, the EIB reacted to favourable market conditions to bring its first 3-year EARN in two years. The oversubscribed order book (the largest ever for an EARN), in combination with the excellent quality of the demand and pricing at the tight end of initial guidance, ticks all the boxes for a successful new EUR 5 billion EARN line. The overwhelming demand from the global real money investor community stands testimony to the EIB's status as a premier issuer, and reflects the strength of international demand for European AAA credit exposure.”

PJ Bye, Head of SSA Syndicate at HSBC said: “With this transaction, the EIB has been highly successful in bringing the right trade to the market at the right time. EIB's decision to issue a rare short end EUR benchmark security delighted the central bank community, whilst the significant oversubscription will ensure a strong secondary market performance.”

Olivier Vion, Managing Director, Head of Frequent Borrowers Origination at JP Morgan, said “With this new € 5 billion EARN, the EIB returned in style to the benchmark market, showing its appeal was as strong as ever despite new competition in the SSA arena. It was able to gather one of their largest EARN orderbook, in the footsteps of the other European institutions issuing this month and printing a deal of the same size, choosing the right maturity at the right time.”

Summary Terms and Conditions for the new Bond Issue

BACKGROUND INFORMATION ON EIB

The European Investment Bank, based in Luxembourg, was set up in 1958 under the Treaty of Rome. Owned by the European Union Member States, the EIB is the EU’s long-term lending institution, financing projects that promote European economic development and integration. Besides supporting projects in the Member States, its main lending priorities include financing investments in future Member States of the EU and EU Partner countries. The EIB operates on a non-profit maximising basis. The Bank’s consistent AAA rating is underpinned by firm shareholder support, a strong capital base, exceptional asset quality, conservative risk management and a sound funding strategy. In 2010, EIB raised EUR 67 billion.