EIB prices 5-year US$ 3bn Global bond

• Issue priced at +22 bps over US Treasuries
• Balanced and well diversified book internationally
• Increases USD Global benchmark outstandings to US$28 bn
• Reinforces positioning as largest and most frequent issuer of USD Globals among supranationals
• Demonstrates strategic commitment to issue in key benchmark maturities
• Follows record US$ issuance in 2003: over US$13.5bn raised

In the year's first US$ Global benchmark issue among supranationals and agencies, the European Investment Bank (EIB') priced a US$ 3 bn Global issue, with a maturity of 16 March 2009. With this offering, the European Investment Bank now has a US$ Global yield curve consisting of benchmarks worth an aggregate of US$ 28 billion.

The transaction, lead managed by Citigroup, Goldman Sachs and UBS, achieved a spread of +22 bps over the 3.375% US Treasury due 15 Dec 2008, representing a level considerably through US agencies. The issue pays a coupon of 3.375% and has an issue price of 99.538%. Co-managers were Barclays, BNP Paribas, Bear Stearns, Deutsche Bank, CSFB, HSBC, JP Morgan, Morgan Stanley, Nomura, and RBS.

After an award winning borrowing programme in 2003, EIB responded to demand for high quality liquid investments with a new global offering in the 5-year sector. In the midst of the typical high level of quality supply in the early part of the year, this transaction was warmly received by investors from around the world, with demand for safe, liquid securities remaining at high levels.

In this transaction, the role of Japanese investors was particularly noteworthy, with high quality orders received early in the book-building phase. Non-Japan Asia comprised the largest share of the book, as has typically been the case on EIB US$ Global offerings, and orders came mostly from central banks in the region managing large US$ reserves. Demand from Europe and the US was also solid, originating primarily from fund managers and mutual funds looking for liquid investments for cash built up over the year-end.

The composition of demand was as follows:

Comments from EIB and the Lead Managers:

EIB's René Karsenti, Director General, Finance, said: The US$ Global market remains a key pillar of EIB's funding program, and we will continue to build our track record of providing investors with high performing securities that offer an attractive degree of security and liquidity. In this issue, the breadth and quality of the book is a testament to the growing appeal of EIB bonds and our strong ability to respond to market requirements.

Citigroup's Charles Berman, Co-Head of European Credit Markets said: "The EIB has once again demonstrated its position as the benchmark borrower in the AAA US Dollar sector with an issue that has attracted investors from all of the key buying centres for US$ securities. Demand from Japan and SE Asia was particularly strong, and with this deal EIB has further developed its US investor base".

Goldman Sachs' Michael Sherwood, Head of Fixed Income, Currency and Commodities, Europe, said: This transaction reaffirms EIB's strategic emphasis on the Global markets and provides a solid foundation for another year of successful issues, after an award winning year in 2003. Starting off the usually high early January supply, EIB succeeds with an order book comprised of some of the highest quality investors from around the world.

UBS Investment Bank's C. Allegra Berman, Managing Director, Global Head of Frequent Borrower Coverage, said: "At some 20 basis points through US Agencies on a curve-adjusted basis, the EIB has once again demonstrated that it is the issuer of choice for the global investor community. This issue has opened up the 5-year sector for 2004 and will be the benchmark in this tenor."

Background information on EIB

Owned by the European Union Member States, the EIB is the EU's long-term lending institution, financing projects that promote European economic development and integration. Besides supporting projects in the Member States, its main lending priorities include financing investments to prepare the economies of the EU Accession Countries. The EIB operates on a non-profit maximising basis and lends at close to the cost of borrowing. The Bank has AAA credit ratings with a stable outlook.

Borrowing results in 2003

In 2003, it borrowed nearly EUR 42 billion, which consolidates its position as the largest supranational borrower. Last year funds were raised in 15 currencies, with around 88% raised in EUR, GBP and USD. EIB received awards in 2003 for Supranational / Agency Borrower of the Year' and Euro-MTN Program of the Year' from IFR, and an award for Best Supranational/Agency Borrower' from Euromoney.