The EIB prices a new 10-year US$ 1bn Global Bond

On its fourth appearance in the US$ Global market in 2003, the European Investment Bank (EIB) today extends both its successful track record and Global yield curve with a new 10-year bond via Lead Managers Goldman Sachs, JP Morgan Securities and UBS Warburg. Co-managers on the offering are BNP Paribas, Barclays Capital, Citigroup, Credit Suisse First Boston, Deutsche Bank, Merrill Lynch, Morgan Stanley, and Nomura. The new benchmark pays a coupon of 3.375% and has an Issue Price of 99.011%, to give a spread of 18 bps over the 3.625% US Treasury due May 2013.

After having issued strategic benchmarks in the 3-year and 5-year maturities over the past few years, the EIB has had an ongoing strategic interest in extending its Global US$ yield curve to the full 10-years. Investors, at times, have desired the ability to alter their maturity exposure in US$'s while remaining in EIB securities, and today's new issue extends investors' ability to do this to the important 10-year maturity.

Over the past year, the Sovereign/Supranational 10-year US$ sector has been re-developing after a few years of inactivity and muted investor interest. The current, low-yielding, steep-curve environment has encouraged long dated investments that have, in turn, renewed activity levels in the 10-year sector not seen in the sovereign/supranational sector in some time. While still a smaller market than the well-developed 3 and 5-year sectors, the demand and activity has once again reached levels where the traditional US$ 1 billion Global bond can be executed successfully and enjoy global distribution. With this offering, the European Investment Bank's US$ Global yield curve totals US$ 26 billion with maturities from 2004 to 2013.

The offering met with a warm reception by investors around the world. Asia, due to the traditionally strong following that the EIB enjoys in this region, was the largest source of demand, and included the central banks across non-Japan Asia, as well as Japanese fund managers, pensions and regional banks. In Europe and the Middle East, interest for the transaction was well diversified, arising from fund managers, insurers and private banks. Having priced substantially through US Agencies made the US interest for this EIB offering particularly noteworthy. Demand from North America was comprised of State pension funds, mutual and asset managers and insurers who value the safety, rarity and performance offered by the EIB in this important, strategic maturity.

Having issued in the 3, 5 and 7 year sectors, the obvious goal was to issue a benchmark in the 10-year sector. For quite some time, we had been looking forward to re-entering this important maturity in a size large enough to ensure the liquidity and performance that our investors have come to expect from EIB securities. We are very pleased that this benchmark has seen such broad distribution from both our traditional and new investors. said René Karsenti, Director General of Finance at the EIB.

Goldman Sachs' Michael Sherwood, Head of European/Asian Fixed Income commented, The first and only other 10-year Global bond by EIB was in 1996, making today's offering a rare eventwith which we are delighted to have been entrusted. Once again, EIB's franchise with investors around the world is evident from the quality and breadth of the order book.

Michael Ridley, Head of European Syndicate at JP Morgan, commented, "The pricing and global distribution of this transaction illustrates the quality of the EIB brand in the capital markets. By extending their benchmark curve out to 10-years, the EIB has once again reaffirmed its strategic commitment to the US dollar market and JP Morgan is honoured to have been involved with this groundbreaking transaction."

C. Allegra Berman, Global Head of Frequent Borrower Coverage at UBS Warburg commented "UBS Warburg was delighted to participate is such a prestigious debt financing for the EIB. It was particularly pleasing to see 20% of orders from US accounts considering the issue was priced at 18 basis points though the US Agency curve. This is a demonstration of the increasing focus on diversification within this account base."

The European Investment Bank is the European Union's international financing institution - the EU member states are its shareholders. With an AAA/Aaa credit rating, the EIB raises funds in the capital markets to provide long-term funds in support of projects furthering EU economic objectives.