The European Bank for Reconstruction and Development (EBRD) has launched and priced a US$ 1.25 billion four-year Global bond issue. It was the Bank’s first public Global benchmark of 2017.
The Bank invests in the development of market-oriented economies and the promotion of private and entrepreneurial initiative in more than 30 countries from Morocco to Mongolia and from Estonia to Egypt.
Final terms of the transaction
Amount: US$ 1.25 billion
Settlement Date: 1st February 2017
Maturity Date: 1st February 2021
Coupon: 2.00% per annum, payable semi-annually
Issue Price: 99.946%
Spread: + 12 bps over Mid Swaps / + 51.15 bps over the underlying US Treasury (UST 1.375% due January 2020)
Interest Dates: 1st February and 1st August
Listing: London Stock Exchange
Joint Lead Managers: Barclays, BofA Merrill Lynch, BMO Capital Markets, Morgan Stanley
Co Managers: Citi, Deutsche Bank, HSBC, JPMorgan, Société Générale and TD Securities
The European Bank for Reconstruction and Development (EBRD, Aaa/AAA/AAA) has successfully launched and priced a US$1.25 billion four-year Global bond issue, the borrower’s first public Global benchmark of 2017.
The transaction is EBRD’s second four-year benchmark following the US$1.25 billion August-2020 which priced in 2016.
Launch and execution process
The mandate was announced early London morning at 09:00 on Tuesday 24th January. This was followed by further transaction details together with Initial Price Thoughts of MS+13 bps area, which were released at 13:00 London that same afternoon. Indications of interest were garnered over the course of the afternoon and were in excess of US$ 900 million at the London open on the following morning when books were formally opened with official price guidance unchanged at MS+13 bps area.
Orderbook momentum continued to grow during the morning and was over US$1.4 billion by 13:00 London, allowing for the spread to be set at MS+12 bps. Final books closed at 14:30 London in excess of US$ 1.45 billion, allowing EBRD to launch a US$ 1.25 billion transaction, and reflecting the strong support and quality of the investors’ interest.
EBRD’s 4-year Global Bond priced at 16.50 London time at a price of 99.946% and pays a coupon of 2.00% per annum through semi-annual payments. This gives investors a yield of 2.014% (s.a) equivalent to a spread of 51.15 bps above the underlying 3-year UST, 1.375% January-2020.
Central Banks / Official institutions and Banks drove demand for the transaction, taking 46.0% and 35.2% of allocations respectively. This was supported with 10.8% from Asset and Fund Managers with the final 8.0% from Pension Funds, Insurance and Corporates. The transaction garnered interest from around the globe, leading with European accounts who took 39.6% followed by the Americas 35.8%, Asia 16% and finally ME and Africa 8.6%. 36 investors participated in the transaction.
The transaction was joint-lead managed by Barclays, BofA Merrill Lynch, BMO Capital Markets and Morgan Stanley.