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The European Investment Bank launches its new borrowing strategy in support of the Euro

Reference: 1997-009-EN

Date: 25/02/1997

The European Investment Bank, the European Union's long-term financing institution, floated its first Euro-denominated bond issue for an amount of 1 billion, on 31 January 1997. Carrying a coupon of 5.25% and a maturity of seven years, this issue is being lead-managed jointly by the Caisse des Dépôts et Consignations, Banque Paribas and S.B.C. Warburg. In view of the success of this issue, a second fungible tranche of Euro 300 million was launched on 20 February 1997 in response to demand especially from retail investors, who were not able to purchase as many of the bonds as they wished at the time of the first issue.

This Euro-denominated borrowing is accompanied by two so-called "Euro-tributary" issues launched by the EIB :

  • a bond issue for one billion Dutch guilders, floated on 29 January 1997, under terms enabling the Bank to re-denominate it in Euro as from the start of 1999, with the coming into force of the third stage of EMU;
  • an FRF 3 billion borrowing, issued on 18 February 1997, with the same terms and conditions and fungible with the guilder issue.

Talking about these operations, EIB President Sir Brian Unwin stated that: "These issues reinforce our role as the European Union's financing arm and form part of our long-term strategy to support Europe's monetary union and economic integration".

Over the next two years, the EIB plans to continue issuing other "Euro-tributary" benchmark bonds in various EU currencies and maturity categories under the same conditions and similarly convertible into Euros.

The Bank intends to consolidate these future "Euro-tributaries" with other Euro and ECU issues to create, for each maturity category, larger single Euro issues after January 1999. With these benchmark issues convertible into Euros, the EIB will be contributing to development of a major Euro market.

These issues in the currencies of EU countries, fungible with Euro and ECU issues, will enable the EIB to contribute to building up liquidity rapidly in the Euro market and to create an early Euro benchmark yield curve.