| EIB increases 10-year “Cooperative FRN” by EUR 500m to EUR 1.5bn |
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12/10/2009 15:27 (853 Day 09:03 minutes ago) | |||||
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The FINANCIAL -- The European Investment Bank (“EIB”), the long-term financing institution of the EU, has on October 12 increased its EUR 1 billion Cooperative Floating Rate Note (FRN) due on 15 January 2020 by EUR 500 million to EUR 1.5 billion.
The FRN is launched under EIB’s EMTN-Programme, in a format compatible with the eligibility requirements for monetary operations with the Eurosystem and is listed in Luxembourg. It pays a coupon of 3M Euribor + 17.5 bps and has a reoffer price of 100.287 %. The reoffer spread is 3M Euribor + 15 bps, on the bid side of secondary market quotations.
The total order-book amounted to over EUR 600 million, providing evidence of continued interest for FRNs of the EIB in the recent spread tightening trend. The decision to limit the size of the increase to EUR 500 million aims to foster secondary market performance.
"This transaction builds on the three EUR 1 billion “Cooperative FRNs” issued by the EIB in July-August in the 5, 7 and 10 year maturities. These issues provide a transparent reference for the pricing of FRNs in the absence of other benchmarks in these maturities. Including today´s increase and the recent EUR 750 million tap of the Cooperative FRN due 01/2015, the three bonds now amount to EUR 4.25 billion in total," EIB informs.
The issue has again been distributed by a syndicate entirely composed of European cooperative and popular banks (10 banks from 6 different countries), under the lead management of Banca Akros, the investment bank of Banca Popolare di Milano, Calyon, the investment bank of Crédit Agricole , and DZ BANK, the German Central Cooperative Bank. Strong additional support came from the Unico Banking Group (an association of leading cooperative banks in Europe representing a share of more than 20% in the European retail market).
This syndicate structure extends to the capital markets the strong cooperation already existing between the EIB and the cooperative/popular banking sector on the lending side in support of European SMEs. The success of the “Cooperative FRNs” proves the strong placement power of this kind of intermediary when they network to maximize their synergy, as well as the value of EIB’s continued efforts to address the needs of new distribution channels and end investors.
The transaction has also found a good reception outside the cooperative sector, with strong demand from asset managers, pension funds and insurance companies.
With this transaction, EIB has now raised EUR 73.5 billion (close to 92%) of its EUR 80billion 2009 funding programme.
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