The European Investment Bank today priced its second new benchmark Euro Area Reference Note (EARN) of 2013.

Strong Asian and central bank demand for EIB EUR 4bn 7-year EARN

• Transaction driven by strong demand from Asia and central banks, complemented by granular distribution to European investors
• Refreshes yield curve with a liquid size 7-year EARN

8-3-2013 — /europawire.eu/ — The European Investment Bank today priced its second new benchmark Euro Area Reference Note (EARN) of 2013. The issue carries an annual coupon of 1.5% and has a final maturity date of 15^th July 2020. This offering represents EIB’s first new seven-year EARN since October 2011 (a EUR 3 billion issue), and contributes toward deepening EIB’s EARNs curve with a liquid, current coupon line. The bond was priced at a spread of mid-swaps plus 16 bps, in line with the initial guidance of mid-swaps plus 16 bps area, equating to a spread of +58.7 bps over the Bund 3% due July 2020.

The final order book stood in excess of EUR 4.5bn, consisting of around 150 different orders – demonstrating scale and granularity of demand. Strong demand from central banks, notably in Asia, was complemented by highly granular European demand.

Composition* of demand for the EARN issue:

*after allocation

With this transaction, EIB has raised more than EUR 29.5bn or 42% of its EUR 70bn 2013 funding programme. Total EARNs outstandings have reached around EUR 140 billion across 26 lines.

Comments on the issue:

Bertrand de Mazières, Director General of Finance at the EIB, said: “The issue catered to strong demand in this maturity, notably among central banks. Investors welcomed the increment in yield and spread provided by the steepness of the curve between 5 and 7 years. The issue was timed to respond to a window of stability following the latest volatility. This resulted in a solid transaction, attracted strong demand from Asia, complemented by more granular distribution in Europe.’’

Edward Rhys, SSA Debt Capital Markets, BNP Paribas, said: “With this 7-year EARN the EIB has once again demonstrated cost-efficient access to the Euro market, even during periods of heightened volatility. The issuer’s patient approach resulted in large volume and an impressive pricing outcome, whilst ensuring a well-diversified order book.”

Philip Brown, Head of SSA Origination at Citigroup, said: “EIB took advantage of a relatively low SSA and sovereign supply week to stand centre stage & gain maximum investor attention. Pricing a €4bn, 7 year deal with a minimal concession to EIB’s outstanding curve is a fantastic result and highlights the benchmark status of EIB within the AAA Euro Rates investor community.’’

Bill Northfield, Head of SSA Origination, Deutsche Bank, said: “EIB has executed another impressive EARN offering, swiftly capitalising on the sweet spot of demand in the seven-year maturity. The strong and well diversified international investor demand, despite the low yield environment and fine pricing on the bond, is a testament to EIB’s loyal investor following. This is particularly noteworthy amidst a backdrop of simmering headline risk on the European periphery.’’

Stuart McGregor, Head of European SSA DCM, RBC CM, said: “The strength of interest in the EIB EUR benchmark product was again soundly demonstrated by this transaction. Noteworthy features of the transaction included the scale and granularity of the orderbook, the volume of orders received from non EU-based investors, speed of execution; all round a great result for the second new EARN line of the year.’’

Summary Terms and Conditions for the new Bond Issue

EIB funding strategy and results

The Bank’s funding strategy combines a consistent and transparent approach with flexibility and innovation, both in terms of product and maturity. In 2012, the EIB raised EUR 71 billion, and it plans to borrow EUR 70 billion in 2013.

Background information on EIB

The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. The Bank’s strong credit standing is underpinned by exceptional asset quality, a strong capital base, firm shareholder support, conservative risk management and a sound funding strategy.

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Investor Relations
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