the EU bank

On Monday 26 May the European Investment Bank (EIB) will launch the first bond issue underwritten and placed by a syndicate composed exclusively of cooperative banks (“banche popolari”). This initiative is unprecedented and the EIB intends to replicate it in other European countries.

 The public offer will extend until 20 June, to enable the bonds to be placed in a transparent manner and on a wide scale, to include also small investors. The minimum purchase price has therefore been fixed at only EUR 1 000. The operation was announced by EIB Vice-President Dario Scannapieco in Rome at a meeting between Associazione Nazionale fra le Banche Popolari (the national association of cooperative banks) and the EIB. The minimum amount of the issue – payment due on 30 June 2008, maturing on 30 June 2014, with a variable coupon fixed at 4.5% initially and capped at 5% – will be EUR 180 million. The issue may be increased to a maximum of EUR 500 million if there is heavy demand from investors during the offer period.

Group, a limited liability company set up to promote the placing of larger bond issues via the branch networks of the member cooperative banks, will act as financial coordinator for the operation. The syndicate will be organised and managed, as lead managers, by Group’s member banks:

• Banca Akros S.p.a. (Gruppo Banca Popolare di Milano)
• Banca Aletti & C. S.p.a. (Gruppo Banco Popolare)
• Banca Popolare dell’Emilia Romagna S.C.p.A.
• Banca Popolare di Sondrio S.C.p.A.
• Centrobanca S.p.a. (Gruppo UBI Banca).

The aim of the operation is twofold: to raise the profile of the cooperative banking groups in Italy, which are increasingly collaborating to seize new market opportunities; and to respond to growing interest from intermediaries in diversifying their portfolios and in small investors, by offering securities with a high credit rating (AAA) and guaranteed repayment of principal at maturity.

“The syndication and placement of this product via the cooperative banks”, said EIB Vice-President Dario Scannapieco, “highlights the role and growing potential of the Italian cooperative banks on the primary debt market, also at the international level”. This operation “offers investors an EIB product at a time of uncertainty on the financial markets and against the backdrop of the system to protect small investors established by MiFID, the directive that provides for new rules governing the conduct of intermediaries towards their clients on the financial markets.”