European Investment Bank in New York City

A senior delegation from the European Investment Bank (EIB) is in New York this week. The delegation, headed by the EIB President and Chairman of the Board, Philippe Maystadt, is holding talks with key financial institutions to provide an update on its policies and perspectives. The Bank has also concluded arrangements to list all its outstanding USD global bond issues - seven issues for a total US $ 18 billion - on the New York Stock Exchange.

The EIB is the European Union's long-term lending institution, financing capital projects that promote European economic development and integration. It was established in 1958 under the Treaty of Rome that launched the EU. Besides supporting projects in its Member States, its main lending priorities include financing investment to prepare the economies of the Accession Countries, mostly in Central and Eastern Europe, for EU membership. In this context it is becoming increasingly active in the region's domestic capital markets. The EIB is also setting up a new facility to promote development, particularly in the private sector, in the non-member Mediterranean Countries. The Bank also promotes EU external development aid policies in the African, Caribbean and Pacific regions, as well as in Latin America and Asia.

The EIB's shareholders are the 15 EU Member States. Europe's four largest economies (France, Germany, Italy and the UK) provide about 71% of the subscribed capital. To meet growing demand for its financing, the Members are increasing its capital by 50% to a total EUR 150 billion from next year. Under its Statute, this raises the headroom for the Bank's lending activities to EUR 375 billion. The entire capital increase will be funded from the EIB's reserves.

The EIB operates on a non-profit maximising and self-financing basis. It passes on the benefits of its AAA credit rating, based on a sound loan portfolio and strong support from its Members, to projects at close to the cost of borrowing. In 2001, it lent nearly EUR 37 billion, of which EUR 31 billion was within the EU and EUR 6 billion in non-member countries.

The EIB is the largest supranational lender and at the end of December 2001 had loans outstanding of about EUR 221 billion. The EIB is also the largest supranational borrower in the global capital markets. Last year, the EIB raised over EUR 32 billion equivalent in nearly 150 transactions - over 40% in USD. The estimated funding for this year is for EUR 38 billion equivalent, of which EUR 33 billion in 14 currencies has already been raised. The Bank's USD funding program is a major building block of the Bank's presence in the capital markets. Currently, the Bank has USD 28 billion outstanding in USD benchmark bonds, of which USD 17 billion are in global format. Targeting the size and breadth of the U.S. investor base is key to the EIB's strategic approach to the USD market.