NIB Achieves Record Demand with Largest-Ever USD Bond Issue

NIB Achieves Record Demand with Largest-Ever USD Bond Issue

(IN BRIEF) Nordic Investment Bank (NIB) recently priced a five-year USD 1.5 billion global benchmark bond, marking its first USD benchmark issuance of 2024. The transaction saw unprecedented demand, with the orderbook surpassing USD 4.5 billion, making it NIB’s largest USD orderbook to date. The bond, which achieved one of the tightest spreads over five-year US Treasuries for a supranational issuance this year, reflects strong global trust in NIB’s credit. With over 110 orders, including from rare investors, the bond underscores NIB’s broad appeal and high-quality investor base, with Central Banks and other institutions notably receiving 47% of allocations. The transaction, priced at a semi-annual coupon of 4.250% and maturing on 28 February 2029, received widespread acclaim from joint lead managers and highlights NIB’s strategic approach to funding and investor relations.

(PRESS RELEASE) HELSINKI, 23-Feb-2024 — /EuropaWire/ — On 21 February, NIB priced a five-year USD 1.5 billion global benchmark bond, its first USD benchmark issuance of 2024 following green transactions in NOK and EUR. The transaction is NIB’s largest ever USD orderbook to date, surpassing USD 4.5 billion, and secured one of the tightest spreads over five-year US Treasuries for a supranational issuance this year, reinforcing NIB’s strong standing within the global SSA investor community.

The threefold oversubscription of NIB’s first syndicated USD issuance of the year demonstrates strong global trust in its credit. Attracting over 110 orders, including from rare investors, the benchmark highlighted its broad appeal and high-quality investor base, with Central Banks and other institutions notably receiving 47% of allocations. This robust demand allowed NIB to minimize new issue concessions, showcasing solid market support for its financial instruments.

Priced with a semi-annual coupon of 4.250% and maturing on 28 February 2029, the bond achieved a spread of 13.1 basis points over the 5-year US Treasury note, equivalent to SOFR mid-swaps plus 37 basis points, with a yield of 4.369%. Announced on 20 February with initial price thoughts (IPTs) at SOFR mid-swaps plus 40 basis points, the orderbook exceeded USD 4.5 billion, demonstrating strong investor demand, and leading to a final spread 3 basis points inside IPTs. This allowed NIB to comfortably set the size to USD 1.5 billion.

“The yearly five-year global USD benchmark transaction is a cornerstone in our funding program. Hence, we are very pleased to see such a fantastic outcome with our issuance yesterday being supported by a well-diversified global investor group. I am pleased to see that the Funding team, based on the strong interest, decided to increase the size from USD 1bn to 1.5bn,” says Kim Skov Jensen, CFO & Head of Treasury & Finance, Nordic Investment Bank.

“We have been targeting the week after Chinese holidays for our first USD benchmark for the year and it seems the strategy paid well off. With a record book of 4.5 billion, we are very happy to see investors appreciate a rare USD benchmark issuer from a strong region,” comments Jens Hellerup, Head of Funding & Investor Relations at Nordic Investment Bank.

In terms of investor participation, geographical distribution was mainly dominated by Asian and North American Investors with each 38%, followed by EMEA with 24%. In terms of investor type, CB/OIs got the lions share with 47%, followed by Banks with 42%, Asset Managers with 8% and Others with 3%.

Citibank, Deutsche Bank, HSBC and J.P. Morgan are joint lead managers of the transaction.

“Citi was delighted to be part of NIB’s first Global Dollar benchmark of 2024 which achieved the tightest 5-year pricing in the SSA space so far this year. The diverse and high-quality composition of the final orderbook speaks to NIB’s compelling credit story and diverse investor footprint. Many congratulation to the NIB funding team for such an impressive result!” says Ebba Wexler, Managing Director, Head of Public Sector DCM, from Citi.

“Congratulations to the NIB team for its first USD benchmark transaction of the year. NIB reacted swiftly to a favourable issuance window and achieved a record orderbook in excess of $4.5bn, NIB’s largest USD orderbook. The three-times oversubscribed transaction highlights the strong investor support for NIB’s credit. It was a pleasure for HSBC to be a part of this landmark transaction!” says Sabrina Khalfoune, Director DCM SSA at HSBC.

See a joint press release on the bond transaction (PDF) here.

Bond summary terms:

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.

Media Contacts:

Jens Hellerup
Senior Director
Head of Funding and Investor Relations
+358 961 811 401
jens.hellerup@nib.int

Angela Brusas
Director, Funding and Investor Relations
+358 961 811 403
angela.brusas@nib.int

Alexander Ruf
Director, Funding and Investor Relations
+358 961 811 402
alexander.ruf@nib.int

SOURCE: Nordic Investment Bank