EIB launches its first international Philippine peso bond
-EN
- First synthetic format in this asset class with payments in USD
- 4.15% Coupon, 5 year maturity
The European Investment Bank (EIB), the Bank promoting European objectives, rated Aaa/AAA/AAA (Moody’s/Standard & Poors/Fitch), today launched its first international bond issue denominated in PHP (Philippine pesos).
The issue is for an amount of PHP 2,000 million (EUR 33m approximately) and carries an annual coupon of 4.15%. The bond is synthetic with settlements and payments in US dollars. It is the first PHP bond to be issued in this format in this asset class. The bond has an issue price of 100.475% and matures 25 January 2013. The transaction was lead managed by HSBC.
The bond follows initiatives by the EIB in other emerging currencies in the international capital markets, including Asian (Indonesian rupee) and a range of African currencies (Ghanaian cedi, Mauritian rupee, Botswana pula, Egyptian pounds and Namibian dollars). This transaction is a continuation of EIB’s aim to explore funding possibilities in relevant local currencies, notably with a view to supporting development of local currency markets but also with a view towards potential future lending in local currencies.
The EIB is a longstanding lender in Asia and has also financed major projects in the Philippinessince 1994. The EIB loans in the Philippines amount to EUR 413m for projects covering sectors such as energy, industry, transport, communications and SMEs. The main currencies used have been EUR and USD as no local currency has been available.
Comments from EIB and the Lead Manager on the Bond Issue:
EIB’s Eila Kreivi, Head of Funding for Americas, Asia, Pacific, said: “This issue provides a top-quality alternative for investors in a market with limited international supply. It gives the EIB another opportunity to respond to the growing interest from investors for emerging currencies. “
HSBC, Lead Manager: "HSBC is delighted to deliver this innovative transaction for the European Investment Bank, a highly flexible and responsive borrower. This deal is a significant development for the synthetic local currency market and was driven by investor demand across various regions.”
Background information on EIB
EIB funding strategy and results
The Bank’s funding strategy combines a consistent and transparent approach with flexibility and innovation, both in terms of product and maturity. Under its 2007 program the Bank raised EUR 55 billion.
Profile of EIB
The European Investment Bank, based in Luxembourg, was set up under the Treaty of Rome in 1958. The Bank’s consistent AAA rating is underpinned by firm shareholder support, a strong capital base, exceptional asset quality, conservative risk management and a sound funding strategy.
The Bank’s shareholders are the member states of the European Union. The focus of EIB’s lending activities is to finance projects that promote balanced regional development and economic and social cohesion in an enlarged EU. Other priority objectives for the Bank’s lending activities are:
- a competitive and innovative European economy thanks to additional funding for research and innovation
- efficient and easily accessible trans-European transport and energy networks (TENs)
- support for small and medium-sized enterprises
- the "climate change” dimension of environmental protection but also that of conserving natural resources and improving the quality of life in urban areas
- the objectives of efficiency, diversification and security in the energy sector
- support for countries preparing for EU accession, EU neighbourhood countries & Partner countries benefiting from EU development and cooperation policies
The majority of the Bank’s outstanding loans have been for infrastructure projects, with the largest share taken by transport projects. Other key areas of infrastructure lending have been the energy, water and telecommunications sectors. Apart from infrastructure, other areas of lending have included loans to SMEs via financial intermediaries, as well as loans to industry, healthcare, education, services and agriculture.