First ever EBRD syndicated deal in Sterling market sees strong demand

By Anthony Williams

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The European Bank for Reconstruction and Development (EBRD), rated Aaa/AAA/AAA, has successfully launched its first ever syndicated transaction in the Sterling market in an amount of GBP 200 million.

The issue carries an annual coupon of 1.875% and has a final maturity date of 10 December 2013. The bond was priced at a spread of 55 basis points over the UK Gilt, with an issue price of 99.826%.

The EBRD took advantage of an opportune market window and strong liquidity conditions in the Sterling market to launch this transaction.  The issue was joint lead managed by Deutsche Bank, HSBC and RBC Capital Markets.

The transaction was announced to the market just before 1:00pm UK time on Wednesday 6 April 2011 with books opened immediately. The issue met with strong demand from real money investors over the course of the day.  The final order book closed at 10:15am UK time on Thursday 7 April.

The order book was of excellent quality, with 18 accounts participating.  The transaction enjoyed very strong support from the UK, taking 56% of the transaction. In terms of investor type, asset managers were the main drivers of demand, accounting for 47% of the bonds sold. There was solid demand from banks / private banks (19%), central banks / official institutions (18%), corporates (14%), and insurance / pension funds (2%).

Bond Details

Amount: GBP 200 million
Settlement date: 14 April 2011
Coupon: 1.875% per annum, payable annually
Maturity Date: 10 December 2013
Issue price: 99.826%
Spread: +55 basis points over the underlying UK Gilt (UKT 4.50% due March 2013)
Interest payment dates: 10 December (short first coupon)
Listing: London Stock Exchange
Clearing systems: Euroclear or Clearstream

Investor Distribution

By Geography   By Investor Type  
UK 56% Asset Managers 47%
Europe (ex.UK) 26% Banks/ Private Banks 19%
Asia 18% Central Banks/ Official Institutions 18%
    Corporates 14%
    Insurance/ Pension Funds 2%


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