EIB Prices its EUR 5 billion global EARN

The European Investment Bank has priced today its global EUR 5 billion issue under the EARN programme(1). After over a week of an extensive world-wide investor marketing and book-building process, EIB is issuing the new "on-the-run" five year benchmark, maturing on 15 January 2007, at a spread of 20 bps over the Bund 6% January 2007. The issue carries a coupon of 4% and has an issue price of 99.196%.

The Bookrunners are BNP Paribas, Deutsche Bank and Morgan Stanley, with Senior Co-leads ABN Amro, Barclays, CSFB, Dresdner Kleinwort Wasserstein, Merrill Lynch, and USB Warburg, and Co-leads Banca IMI, BSCH, Caboto, CDC IXIS, Credit Agricole Indosuez, Goldman Sachs, HSBC, JP Morgan Chase, Nomura, and SSSB.

EIB President Philippe Maystadt said: "This global EARN issue underlines EIB's role as a European sovereign-class benchmark issuer, committed to enhance liquidity in the euro market. This reinforces our role as the European Union's long-term lending institution and our long-standing policy of supporting Europe's own currency. The huge and diversified demand for this euro transaction, EIB's largest issue ever, is clearly reflected in the impressive investor order book, both from a qualitative and quantitative perspective. Our strategic approach to the euro market is characterised by transparency and best market practice."

The total investor order book of around EUR 10 bn represents an outstanding over- subscription of the issue amount. More than 400 investors around the world have participated in this bond issue, further broadening EIB's investor base. The regional repartition of placements stands broadly at Europe (60%), Asia (20%), North America (15%), other regions (5%).

Secondary market trading in the issue will immediately be available on EuroMTS and market making in EARN benchmarks is furthermore supported by the 16 EARN Primary Dealers.

The new issue builds on EIB's long-standing presence in the euro market. With this issue, the EARN curve comprises nine benchmarks covering maturities from 2003 to 2010, with outstanding volume of almost EUR40 billion. The entire EARN benchmark curve trades on MTS, with the four largest benchmarks trading on EuroMTS as well.

EIB has had an important historical presence in the euro market. In 1996, it issued the first ECU bonds with guaranteed 1:1 conversion into euro; in 1997, it issued the first ever bond denominated in euro; in 1998, its first euro global, and in 1999, it was the first quasi-government borrower to set up a large-scale euro benchmark programme with its EARN facility.

EIB Director General of Finance René Karsenti said: "This new EIB benchmark is market driven and priced to ensure secondary market performance for investors. The global format will leverage world-wide investors in the primary market, particularly those looking for sovereign-class quality, bolstering bond liquidity and performance. This furthers EIB's policy to add new highly liquid benchmarks to its EARN curve."

EIB estimates that its funding requirements for 2002 will be around EUR 37 billion equivalent, with at least a third in euro.

Termsheet

(1) Euro Area Reference Notes - EARNs - are EIB benchmark issues in Euros.