The Bank launches a new US$1.75bn 3-year Global benchmark transaction
On Thursday 19 April 2018, the European Bank for Reconstruction and Development (EBRD), rated Aaa (Moody’s) / AAA (S&P) / AAA (Fitch), launched and priced a new US$1.75bn 3-year Global benchmark transaction due 26 April 2021.
This transaction marks EBRD’s largest-ever public USD benchmark.
The issuer reacted to a very strong backdrop in the high grade SSA sector to price the joint tightest USD 3 year transaction of 2018, at MS-3bp.
Demand for the deal came from a variety of high quality investors, and when the spread was set at MS-3 basis points, the final order book was over USD 2.1 billion.
Issuer: European Bank for Reconstruction & Development (EBRD)
Issue amount: USD 1.75 billion
Format: Global (SEC Exempt)
Settlement Date: 26 April 2018
Coupon: 2.75% semi-annual
Maturity Date: 26 April 2021
Issue Price: 99.923%
Spread: -3bp versus USD Mid Swap
+19.65bp over current 3 year UST (UST 2.375% due 15th April 2021)
Interest Dates: 26th April and 26th October, first payment on 26th October 2018
Listing: London Stock Exchange’s Regulated Market
Clearing Systems: Euroclear, Clearstream and DTC
Joint Lead Managers: Bank of America Merrill Lynch, BNP Paribas, HSBC, Morgan Stanley
The transaction mandate was announced to the market on Wednesday 18th April just before 9am London time, with initial pricing thoughts of MS-2 bps area. Indications of interest were gathered throughout the day across markets, with demand in excess of USD1.4bn when books opened formally on Thursday 19th of April just before 8 am London time. At this point price guidance was MS-3bp area.
The order book kept up a strong pace of growth throughout the morning and the spread was set at MS-3bp shortly after midday. With demand remaining firm in the book, transaction size was announced at USD1.75bn, and the trade was priced around 4pm London time.
This transaction was joint-lead managed by Bank of America Merrill Lynch, BNP Paribas, HSBC and Morgan Stanley.
The ERBD reached a broad audience of international investors. The largest distribution was to the Americas at 43%, followed by EMEA at 34% and Asia at 23%.
The main investor categories were central banks and official institutions (41%), banks (35%), and asset and fund managers (24%).