The European Bank for Reconstruction and Development (EBRD) has launched a USD1bn seven-year global bond issue, the borrower’s first ever benchmark offering in this maturity.
This transaction responds to global investor demand for the highest quality fixed-income investments, against the continued overall flight to quality and the backdrop of appetite for yield and widening swap spreads at the time of announcing the trade.
Demand for the triple-A borrower’s latest issue was significant at the indicated price of five basis points above mid-swaps, with no pushback on level from accounts. This enabled EBRD to price its deal flat to Asian Development Bank’s seven-year Global Bond, flat to African Development Bank’s five-year deal and with only a small curve concession to IADB’s five-year Global Bond from earlier this year.
“This transaction is yet another affirmation of the high regard in which EBRD is held. We have recently received confirmation by the rating agencies of our AAA ratings and ‘stable’ outlooks, which S&P, under its new methodology, has noted would also apply on a standalone basis. The evidence of this transaction demonstrates that investors continue to appreciate EBRD as a strong and stable credit,” says the EBRD’s deputy treasurer and head of funding Isabelle Laurent.
The breadth and diversity of the order book, with an emphasis on the highest quality investors, suggest that many accounts continue to see value in sovereign/supranational/agency assets of the calibre of the EBRD.
The transaction was announced during the course of the Asian morning, with books formally opening at approximately 8:00 am UK time on 28 January. The book built steadily to USD700m by the New York open, and closed at 3.45 pm UK time.
This transaction was joint-lead managed by JP Morgan, HSBC, Morgan Stanley, and RBC Capital Markets.
