Strong Demand for EIB’s First Benchmark Transaction of 2013

– First GBP transaction of 2013 from any issuer sector

– Well diversified orderbook of GBP 2 billon from over 50 investors

4-1-2013 — /europawire.eu/ — On Thursday 3^rd January 2013, the European Investment Bank launched its first benchmark transaction of 2013 with a new 5-year Sterling line due 15^th January 2018. The transaction carries a coupon of 1.375% and priced at 40bps over the UKT 5% due March 2018.

The orderbook opened at 8:25am UK time on Thursday, with a minimum deal size of GBP 500 million and price guidance of UKT 5 18 + 40/42 bps. The transaction met with strong UK demand from the outset. The book closed at 10:30am London time, having reached around GBP 2 billion. It allowed EIB to price a capped deal of GBP 1 billion at a final spread of UKT 5 18 + 40 bps, at the tight end of the initial price guidance. At GBP 1 billion, this is the joint largest ever new 5-year GBP issue from EIB.

The transaction enjoyed very strong support from UK investors, who took 80% of bonds sold. Bank treasuries were the main drivers of demand, accounting for 74% of allocations, with solid support coming from central banks / official institutions (16%), fund managers (7%), insurance / pension funds (2%) and private banks (1%).

Composition of demand for the issue:

By Geographical Region	By Investor Type
UK – 80%	Banks – 74%
Asia – 15%	Central banks / official institutions – 16%
Middle East/ Africa – 2%	Fund managers – 7%
Europe (ex. UK) – 2%	Insurance / pension funds – 2%
Other – 1%	Private banks – 1%

Bertrand de Mazières, Director General of Finance at the EIB, said: “The first sterling benchmark in 2013 was well received and emphasizes a continued and widespread market acceptance for the EIB’s strategic issuance approach. The lion’s share of demand originated from UK based investors together with Asian accounts and also capitalised on improved market sentiment towards Europe which builds a solid base for the EIB’s 2013 funding activities.”

Lee Cumbes, Managing Director, Head of Frequent Borrower Origination at Barclays said: “EIB has opened the sterling SSA market in impressive fashion. A confident and deft move in the very first window of 2013 confirms the issuer’s leadership in this sector, building a fine book of top real money investors, ranging across funds, central banks and bank treasuries. A great result.”

Adrien de Naurois, Director on Deutsche Bank’s SSA Syndicate desk said: “The EIB’s oversubscribed and extremely well placed new sterling benchmark sends a strong signal at the start of their GBP and overall benchmark funding programme for 2013.”

Asif Sherani, Associate Director on HSBC’s SSA Syndicate desk said: “A very successful trade by EIB to open the GBP market in 2013, capturing an ideal issuance window and attractive market conditions. The deal was met with extremely high demand representing one of the largest GBP SSA orderbooks we have seen for a while.”

Keith Price, Managing Director on J.P.Morgan’s Syndicate desk said: “A very strong start to the year for EIB with books garnering GBP 2 billion order in under 2 hours exhibiting EIB’s deep access to benchmark funding.”

Stuart McGregor, Head of European SSA DCM at RBC Capital Markets said: “The EIB has again shown great initiative and leadership in responding to investor appetite, identifying the best possible execution window for a new benchmark – quite an accomplishment in these markets.”

Summary Terms and Conditions for the new Bond Issue

Issue Amount	GBP 1 billion
Pricing Date	3 January 2013
Payment Date	14 January 2013
Maturity Date	15 January 2018
Annual Coupon	1.375% annual
Re-offer Spread	+ 40 bps over UKT March 2018
Listing	Luxembourg Stock Exchange’s Regulated Market
Joint Lead Managers	Barclays,Deutsche Bank, HSBC, J.P.Morgan and RBC Capital Markets

BACKGROUND INFORMATION

EIB in the Sterling market

The EIB has been an active participant in the Sterling market since 1977. It established a position as the leading Sterling issuer alongside the UK government, and holds the largest share of the Barclays Sterling non-Gilt Index (currently the EIB has a weighting of 7.4% in the Index). Its provision of a comprehensive and liquid yield curve, reaching out to 2054, is indicative of the Bank’s status and strategic approach. The Bank has a GBP dealer group, designed to develop a pricing policy aimed at providing a high degree of transparency and consistency.

EIB’s GBP (and EUR) issues are eligible collateral at the Bank of England and EIB GBP bonds are eligible instruments for sterling liquidity buffer purposes following FSA rules for UK banks.

Last year, the EIB was the largest issuer in the (non-asset-backed) Sterling non-Gilt market with a share of over 21%, raising GBP 5.2 billion.

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 funded over EUR 70 billion and 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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