• First Supranational SSA Benchmark issue since the Coronavirus pandemic outbreak
  • EIB’s third EUR benchmark in 2020, following successful 5- and 10-year EARNs earlier this year

On Tuesday 24th March, the European Investment Bank (EIB) issued a new EUR 3bn 3 year EARN benchmark. This is EIB’s third EUR benchmark of the year, following a EUR 3bn 5-year in February, and a EUR 5bn 10-year in January. The bond carries a coupon of 0% and has an issue price of 100.571%, providing a spread of 44.9bps over the 0% OBL due April 2023.

The mandate for a EUR 3bn (no grow) 3-year was announced at 08.15 GMT on Tuesday, March 24th, and books were formally opened simultaneously at price guidance mid-swaps +7bps area.

Within an hour, books reached EUR 2.25bn (excl. JLM interest) with price guidance unchanged. Orders continued to grow steadily and by 10:30 GMT interest surpassed EUR 3bn (excluding JLM interest), with the spread set at MS+7bps. The final order book closed at 11:15 GMT, comprising of EUR 3.75bn+ orders across 58 line items.

Comments on the issue:

Andrew McDowell, Vice President at the EIB, said: “We need a strong and rapid European response to COVID-19. Through this transaction, the EU Bank is endeavouring to provide direction for euro capital markets, to be part of that response, in this challenging context. With its investments, EIB will again help Europe in a time of crisis, by providing an immediate and relevant response. We can help to mobilise EUR 40 billion at short notice, supported by guarantees from the EIB Group and the EU budget. We are re-deploying our firepower to where it is needed most, and demonstrating the power of partnership with the EU. This enables us to act with high impact, within our risk capacity. We will immediately focus on assisting small and medium-sized companies, which badly need help, as well as providing extra funding for critical priorities in the healthcare sector, including emergency infrastructure and development of treatments and vaccines.”

Bertrand de Mazières, Director General Finance at the EIB, said: “This transaction exhibits the Bank’s flexibility in adapting to challenging and changing circumstances. EIB continues to make substantial progress on its already well advanced funding program for the year of around EUR60bn, bolstering its capacity to quickly redirect its lending efforts to areas where support is immediately needed.”

Composition of demand:

By Geographical Region

By Investor Type

France

39%

Banks

60%

Austria/Germany/Switzerland

21%

Fund managers & others

22%

United Kingdom

13%

Central Banks / Official Institutions

18%

Benelux

10%

Rest of Europe

10%

Asia

7%

Summary Terms and Conditions for the new bond issue

Issue Amount

EUR 3 billion

Pricing Date

24th March 2020

Payment Date

31st March 2020

Maturity Date

23rd May 2023

Re-offer Price

100.571%

Re-offer Yield

-0.181%

Coupon

0 %, Fixed, Annual, Act/Act

Re-offer Spread

MS + 7bps, OBL 0% 04/23 + 44.9bps

Fees

0.100%

Format

RegS Bearer

Listing

Luxembourg

Joint Lead Managers

Goldman Sachs / HSBC / J.P. Morgan / Unicredit

As of 24th March 2020, and including this transaction, the EIB had raised ~EUR 29bn, approximately 48% of the announced EUR 60bn programme for 2020.