EIB launches first Euro 1 billion bond

The European Investment Bank, the European Unions long-term financing institution, is issuing its first Euro 1 billion bond - ECU 1 billion. The interest rate coupon is 5.25% over seven years. The Bank has appointed La Caisse des Dépôts et Consignations, Banque Paribas, and S.B.C. Warburg as joint lead managers.

Commenting on the issue, the EIB's President and Chairman, Sir Brian Unwin said: "Today's Euro issue and the recent Dutch Guilder "Euro-Tributary" issue, inaugurates a new phase in the EIB's policy of support of the Euro. It reinforces our role as the European Union's financing arm, and forms part of our long-term strategy to support Europe's monetary union and economic integration."

The Euro issue follows the recent successful launch by the EIB of a ten-year "Euro-tributary" Dutch Guilder 1 billion bond under terms that allow the Bank to re-denominate the issue in Euro after January 1999, with the coming into force of EMU-stage III and the creation of the Euro. Over the next two years, the EIB plans to continue to issue other "Euro-tributary" benchmark bonds in different EU currencies and maturity categories under the same conditions.

The Bank intends to consolidate these future "Euro-tributaries" with other Euro/ECU issues to create, for each maturity category, larger single Euro issues after January 1999. With these benchmarks, the EIB will be creating "tributaries" for a major Euro "river".

The fungibility of such future EU national currency issues with Euro/ECU issues launched by the EIB, will enable the Bank to contribute to building up liquidity rapidly in the Euro market and to create an early Euro benchmark yield curve.