News
CEB issues EUR 1 billion 2.875% Benchmark due January 2033
11 January 2023
Transaction highlights:
- Council of Europe Development Bank successfully launches a EUR 1 billion 10-year benchmark amidst a busy EUR SSA pipeline, gathering a very high quality orderbook
- The issuer’s first EUR benchmark of 2023 priced at Mid-Swaps +7 basis points, 1 basis point tighter from initial guidance and offering minimal new issue concession versus peers and its secondary curve
- The transaction comes at an important time for CEB, following the announcement of the Bank’s strategic framework 2023-2027, which includes a strengthening of the CEB’s capital base with a EUR 4.25 billion subscribed capital increase (EUR 1.2 billion paid-in)
PARIS - On Monday, 10th January 2023, Council of Europe Development Bank (CEB), rated Aa1/AAA/AA+ (on review for upgrade/stable/positive), priced a EUR 1 billion “no-grow” 10-year benchmark due 17 January 2033. The Joint Lead Managers on the transaction were BofA Securities, Citi, Credit Agricole CIB and Deutsche Bank. The transaction represents CEB’s first benchmark outing of 2023 and kick starts its EUR funding programme under its EUR 7 billion Borrowing Authorisation for 2023.
Taking advantage of conducive market conditions for EUR SSA at the start of the year, CEB announced the mandate for its new EUR 10-year benchmark on Monday, 09th January 2023 shortly after 10:30am CET.
The transaction was announced with EUR 1 billion “no-grow” language, in line with CEB’s previous 10-year benchmark outings. The new bond extends the Bank’s EUR curve and provides a new reference point to investors.
On the back of high-quality investor engagement from the onset, a swift bookbuilding process led to books last seen over EUR 1.25 billion. This allowed CEB to set the spread 1 basis point tighter at Mid-Swaps + 7 basis points, +68.7 basis points above Bunds and offering a yield of 2.970% to the investors.
The transaction saw strong participation by Asset Managers/Insurance/Pension Funds (39%) and Central Banks/Official Institutions (21%), particularly when comparing to other 10-year supranational supply so far this year. The lions share went to France (26%) and Germany (23%), driven in part by the attractive spread to Bunds and OATs. Distribution into Netherlands/Luxembourg (22%), Austria/Switzerland (12%), the Nordic region (7%) and the UK (6%) equally underpin the broad reach and appeal of CEB’s credit amongst SSA investors.
Investor distribution
By geography
France: 26%
Germany: 23%
Netherlands/Luxembourg: 23%
Austria/Switzerland: 12%
Nordics: 7%
United Kingdom: 6%
Other Europe: 2%
Asia: 1%
By investor type
Banks: 40%
AM: 24%
CB/OI: 21%
Ins/PF: 15%
Set up in 1956, the CEB (Council of Europe Development Bank) has 42 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, on review for upgrade, AAA with Standard & Poor's, stable outlook, AA+ with Fitch Ratings, outlook positive and AAA* with Scope 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.
*unsolicited