Home Europe & UK Exceptional demand for EIB’s first 10-year benchmark of 2016
Exceptional demand for EIB’s first 10-year benchmark of 2016

Exceptional demand for EIB’s first 10-year benchmark of 2016


On Tuesday 5th April 2016, the European Investment Bank launched its second Euro Area Reference Note (EARN) of 2016. The issue carries an annual 0.375% coupon and has a final maturity date of 14th April 2026. The bond was priced at a spread of mid-swaps -9bps, equivalent to a yield of 0.392%. This equated to a spread at the time of pricing of 30.1bps over the 10 year German Bund.

EIB announced the intention to issue a new 10-year EARN on Monday, 4th April. It is the EIB’s second EARN this year, after the EUR 5bn 3-year benchmark issued in January. Books opened on Tuesday 5th April, at 9:00 am CET with price guidance of mid-swaps -8bps area.  The transaction met immediately with strong market demand, and books were in excess of EUR 4bn (including JLMs) at 10.30 am CET. When the spread was set, at 11am CET, the books were over EUR6bn (including joint lead manager interest). The book was finally closed at 12pm CET with orders over EUR 8bn. The deal was later priced at mid-swaps -9bps at a final size of EUR 5bn.

In the final order books more than 120 accounts disclosed interest in the issue. Central banks and official institutions drove the transaction, accounting for 40 percent of the issue, complemented by banks with 32 percent, and also supported by especially strong uptake from funds and asset managers representing 24%. Geographically, almost two thirds of the issue was placed with European investors, while 30% was allocated to investors from Asia, the Pacific and the Americas. Moreover, there was notable interest from Germany, representing over 20% of the issued amount.

With this issue EIB has raised more than EUR 33bn so far this year, and has completed well over half the EUR 60bn funding programme announced for 2016. Total EARNs outstanding are currently EUR 130.75bn across 25 lines with maturities up to 2037.

Comments on the issue:

Eila Kreivi, Director and Head of Capital Markets Department at the EIB:

“After attracting significant demand for its short dated EARN earlier this year, the strong uptake of today’s issue demonstrates responsiveness to investor interest in this part of the curve and that EIB’s Euro benchmark product holds appeal across the curve. EIB’s second EUR 5bn EARN of the year attracted an order book in excess of EUR 8bn, with interest coming from a highly diversified portfolio of investors. This is evidence of the success of EIB’s strategy to maintain a regular market presence.”

Adrien de Naurois, MD, SSA Syndicate at BofA Merrill Lynch:

“Many congratulations to the EIB team. This one was perfect. Right time, credit and price. The result was their largest 10 year for a long time, with fabulous placement and good pricing.“

Damien Carde, MD, Head of Frequent Borrower DCM, RBS:

“Being able to attract such as large order book, during a volatile session with the 10-year Bund tightening by 5bp, is another example of EIB’s unparalleled credit quality amongst the international investor community. This robust performance is highlighted by the fact this is the largest supranational/agency euro transaction of the year.”

John Lee-Tin, Managing Director, Head of SSA DCM & MTNs at J.P.Morgan:

“As the EU Bank, no surprise to see a oversized support for the European Investment Bank in what is considered the Benchmark maturity for the Euro market.  This deal attracted the who’s who of Euro investors, accommodating a jumbo-sized deal size. This will go down as one of the top trades of the year.”

Pierre Blandin, Managing Director, Head of SSA Debt Capital Markets, CA CIB:

“An outstanding result! EIB was able to spot an extremely conducive window of issuance to launch their new 10-year EARN, achieving a fantastic outcome in terms of size (the largest 10 year EUR benchmark issued by a supra/agency borrower since September 2014), quality of orders and pricing. This is a massive recognition of the EIB credit quality and their funding strategy.”



Anand Gupta Editor - EQ Int'l Media Network


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