Largest ever sterling European Investment Bank bond issued

8 Jan 16

The European Investment Bank has priced up two of its bonds this week, one of which amounts to the largest ever issue by a supranational institution in the GBP market.

On Tuesday, the EIB priced a £1.5bn increase of its 1.500% fixed rate bond note, bringing the total size of the bond to £4.475bn. The transaction was the EIB’s first GBP issue of the year, its largest ever issue on the sterling market and the largest ever by a supranational institution on the sterling market in general.

Eila Kreivi, director and head of Capital Markets Department at the EIB, said the issue met with remarkable demand, reflecting the high level of investor interest in the EIB’s sterling benchmark issuances and underlining the bank’s leading position in this market.

The EIB said the transaction attracted 38 high-quality investors and was well diversified. The UK represented over half of the transaction while high demand from Asian accounts took almost a third.

In terms of investor type, demand was strong among bank treasuries and central banks and official institutions took a relatively high share in comparison to other recent EIB GBP benchmark transactions.

The bond will mature in February 2019 and has a coupon rate of 1.500% annually.

Also on Tuesday, the bank announced a €500m increase of its 0.500% climate awareness bond, which matures in 2023, representing the first green bond issuance in 2016.

Kreivi said this reflects the important and urgency of acting upon decisions made at COP21, where 195 world leaders recently signed a historic agreement to tackle climate change.

The bank said green bonds like this one enhance the transparency of climate finance, promote the debate on definitions of what constitutes climate finance and impacts assessment methodologies and reporting principles.

The transaction takes the bond to a total of €11.8bn, which the bank said highlights its commitment to sustainable growth of the green bond market.

Elsewhere, CAF, the development bank of Latin America, announced the issuance of bonds on the Japanese market, which will finance projects aimed at supplying, cleaning and treating residual and irrigation water in the region.

Enrique García, executive president of the bank, said this comes at a crucial moment for LAC, as climate change increases the need for resources to finance sustainable projects that promote development.

The four-year bonds will raise a total of $102m,which will be used to finance several water-related projects throughout LAC. 

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