Nordic Investment Bank’s USD 1 Billion Benchmark Bond Attracts Strong Demand

Nordic Investment Bank’s USD 1 Billion Benchmark Bond Attracts Strong Demand

(IN BRIEF) The Nordic Investment Bank (NIB) has successfully launched a USD 1 billion two-year global benchmark bond on September 6th. The issuance saw strong demand, with final orders reaching USD 2.5 billion, allowing NIB to price the bond at SOFR MS+19bps, three basis points inside the initial guidance. This marks NIB’s second USD benchmark in 2023 and its first two-year benchmark in US dollars since 2020. The issuance attracted over 45 orders, including new investors, with strong geographic diversity. Asian investors dominated with 52% of the allocation, followed by the Americas with 27% and EMEA with 21%. Central Banks and Official Institutions represented 86% of investor types. Crédit Agricole CIB, Deutsche Bank, and J.P. Morgan served as the joint lead managers for the transaction.

(PRESS RELEASE) HELSINKI, 7-Sep-2023 — /EuropaWire/ — The Nordic Investment Bank (NIB), an international financial institution with focus on the Nordic and Baltic countries, on September 6th,  celebrated the successful launch of a long two-year USD 1 billion global benchmark bond, demonstrating robust demand from the global financial markets. The issuance received overwhelming support, with final orderbooks reaching USD 2.5 billion, showcasing investor confidence in NIB’s creditworthiness and financial strength.

This issuance marks a significant milestone for NIB, as it represents the Bank’s second USD benchmark in 2023 and its first two-year benchmark in US dollars since 2020. The strong reception from investors allowed NIB to price the transaction 3 basis points inside the initial guidance, with a spread of SOFR MS+19bps.

“New issuance markets are challenging to navigate – an inverted yield curve and uncertainties surrounding future Central Bank policies make issuance windows shorter and more crowded. By offering a slightly unusual maturity, NIB was able to differentiate itself from other supply while also offering additional value to yield-focused investors. Looking at the orderbook, I am delighted that we can conclude this year’s USD benchmark issuances with such strong investor support,” says Kim Skov Jensen, NIB’s Vice President & CFO.

“With this latest benchmark, we have deviated from our usual practice of issuing three- and five-year USD benchmarks annually. Our assessment was that the inverted yield curve between two and three years would attract yield-oriented investors to a shorter maturity bond. Additionally, from an internal Asset Liability Management perspective, this maturity aligns well with our objectives. The orderbook for this USD 1 billion benchmark reached USD 2.5 billion, with some sizeable orders from new investors. We are happy with the outcome and thank all investors and the banks involved,” comments Jens Hellerup, Head of Funding & Investor Relations at NIB.

NIB’s latest global benchmark bond issuance stands out as one of the largest USD orderbooks in the Bank’s history and reflects one of the tightest spreads over Treasuries from a supranational institution in recent memory. The offering attracted over 45 orders, including participation from new investors, resulting in a geographically diverse and high-quality orderbook.

Geographically, Asian investors dominated the participation, accounting for 52% of the allocation, followed by the Americas with 27% and EMEA with 21%. In terms of investor types, Central Banks and Official Institutions took the majority with 86%, while Banks contributed 9%, Asset Managers represented 4%, and Insurances and Pension Funds accounted for the remaining 1%.

The joint lead managers for this successful transaction are Crédit Agricole CIB, Deutsche Bank, and J.P. Morgan, reflecting the strong partnership and expertise that contributed to its outstanding outcome.

NIB’s ability to attract such widespread interest and achieve favorable pricing underscores its status as a trusted and sought-after issuer in the global financial markets.

“Congratulations to NIB on another highly successful USD benchmark transaction. Attracting such a high-quality book, with over 85% of allocations to Central Bank and Official Institutions, is particularly impressive at such tight spreads to US Treasuries. This strong outcome once again demonstrates the attractiveness of the NIB signature in the USD market,” says Matt Dawes, Vice-President, SSA Syndicate, J.P. Morgan.

See a joint press release on the bond transaction

NIB is an international financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The Bank finances private and public projects in and outside the member countries. NIB has the highest possible credit rating, AAA/Aaa, with the leading rating agencies Standard & Poor’s and Moody’s.

For further information, please contact

Jens Hellerup, Senior Director, Head of Funding and Investor Relations,
at +358 961 811 401, jens.hellerup@nib.int
Angela Brusas, Director, Funding and Investor Relations, at +358 961 811 403, angela.brusas@nib.int
Alexander Ruf, Director, Funding and Investor Relations, at +358 961 811 402, alexander.ruf@nib.int

SOURCE: Nordic Investment Bank