CEB issues a EUR 1 billion ten-year benchmark
1 June 2016
PARIS - On Wednesday 1 June, the CEB successfully launched and priced a new EUR 1 billion 10-year benchmark due 8 June 2026. This is the CEB’s first EUR benchmark transaction in 2016 and follows the USD 1 billion 5-year benchmark priced in March. It is also the CEB’s first EUR benchmark since June 2015, providing a new liquid reference point in the long-end maturity.
The CEB decided to take advantage of the short window ahead of the ECB meeting on Thursday and US nonfarm payrolls on Friday to avoid the potential volatility in the market. Citi, Goldman Sachs International, HSBC and SG CIB were mandated as joint lead managers on the transaction.
The mandate for a EUR 1 billion (no grow) 10-year EUR benchmark was announced at 12pm London time on Tuesday 31 May and initial price thoughts of mid-swaps (MS)-10bps area were released simultaneously. Books were officially opened on Wednesday at 8am London with an unchanged price guidance of MS-10bps area.
The orderbook grew steadily from the outset, allowing CEB to set the spread at MS-10bps after two hours of book-building. Final books closed at 12pm London and saw close to 30 accounts participating. The transaction witnessed particularly strong interest from bank treasuries and fund managers who took up nearly 90% of the total allocation, highlighting CEB’s strong investor franchise in the Euro market.
The deal was priced with a reoffer yield of 0.4245% and offered a limited new issued premium of ~2bps.
Following this transaction, the CEB has completed ~EUR 2.7 billion of its EUR 3.3 billion funding programme for 2016.
Set up in 1956, the CEB (Council of Europe Development Bank) has 41 member states. Twenty-two Central, Eastern and South Eastern European countries, forming the Bank's target countries, are listed among the member states. As a major instrument of the policy of solidarity in Europe, the Bank finances social projects by making available resources raised in conditions reflecting the quality of its rating (Aa1 with Moody's, outlook stable, AA+ with Standard & Poor's, outlook stable and AA+ with Fitch Ratings, outlook stable). It thus grants loans to its member states, and to financial institutions and local authorities in its member states for the financing of projects in the social sector, in accordance with its Articles of Agreement.