EIB Launches first USD global bond of 2003

The European Investment Bank ("EIB") successfully priced a USD 3 billion 3-year global benchmark issue today, its first benchmark global bond of 2003. Deutsche Bank, Morgan Stanley, and Salomon Smith Barney are the joint lead managers and book-runners for the issue with co-lead managers:  ABN AMRO, Barclays, BNP Paribas, Credit Suisse First Boston, Goldman Sachs, HSBC, JP Morgan, Merrill Lynch and Nomura.

The new US$ 3 billion benchmark with a maturity of 15 March 2006 pays a coupon of 2.375% and has an Issue price of 99.666%, to give a spread of 71bps over the 2 year US Treasury.  EIB's choice of maturity reflects the strong investor demand in short dated maturities in current volatile markets, in particular after the recent back up in yields, and fills in a gap in the USD Sov/Supra curve where there is a lack of liquid, current coupon benchmark issues.

The issue is consistent with EIB's strategy of offering large, liquid benchmark issues in global format to investors and continues to benefit from now regular features that mark EIB's USD funding strategy, reaffirming the commitment of EIB to the USD sector:

• Transparency: "Joint Lead Pot, Co-Lead Pot plus Co-Lead retention system" provides the right platform to build rapid momentum and creates investor confidence in the issue providing a solid base for strong secondary market performance.
• Liquidity: The characteristics that assure investors of high levels of liquidity in EIB issues include the Global format, benchmark size of $3bn, narrow bid offer spreads and transparent trading on electronic platforms (TradeWeb, Market Axess, Bloomberg). EIB bonds will also shortly begin trading on MTS and Brokertec. In addition, real-time price updates for the Bank's USD benchmarks are available on EIBUSD01 on Reuters and at EIB<GO> on Bloomberg.

These attractive features of the USD programme resulted again in an issue with broad geographic distribution.

Distribution:

EIB's Director General of Finance, René Karsenti stated: " We are delighted to successfully commence our borrowing programme with this dollar benchmark at an early stage in 2003. We decided to proceed with the issue after it became clear that the appetite from global investors to purchase EIB securities in 2002 had continued undiminished into the New Year. It is another demonstration that the EIB's benchmark strategy has a very strong following in Europe, Asia and the United States and investors are confident about the long term performance of our securities." 

"The strength of the book, the diversity of investors involved and the accelerated pricing of the transaction points to its success and the quality of the EIB name in the global debt markets." said David Shasha, Co-Head of Frequent Borrowers Group at Deutsche Bank.

"EIB has once again proven its ability to achieve truly global distribution. Initial success in Asia provided momentum which led to significant sponsorship in Europe and the US. Importantly EIB's worldwide appeal has enabled the borrower to attract substantial investor demand over a short timeframe." Michael Weston, Global Head of Syndicate at Morgan Stanley.

"The speed at which EIB is able to successfully tap the global markets is a testament to the confidence global investors have in the integrity of EIB's programme" commented Charlie Berman, Co Head of Credit Markets at SSB.

This transaction successfully starts off EIB's 2003 funding programme which is expected to be around €40 billion, combining issuance of large, liquid benchmarks in the main currencies (USD, EUR and GBP) with structured/tailor-made securities in a wide range of currencies.

EIB is the largest supranational borrower in the global capital markets. In 2002, the EIB raised EUR 38 billion equivalent in 219 transactions, in 14 different currencies of which USD represented 38%.  EIB currently has USD 31 billion of benchmark bonds outstanding across the curve of which USD 20 billion are in global format.

The EIB is the European Union's long-term lending institution, financing capital projects that promote European economic development and integration. The EIB's shareholders are the 15 EU Member States. 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. The Bank finances itself through borrowing operations.