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CEB issues USD 1 billion 3-year Bond

17 September 2019

PARIS -On Tuesday 17 September 2019, Council of Europe Development Bank (CEB), rated Aa1 / AAA / AA+ (stable/ stable/ positive), launched a successful USD 1 billion 3-year benchmark bond via BNP Paribas, Morgan Stanley, Nomura and RBC Capital Markets. This is the CEB’s second USD benchmark transaction in 2019, following its 5-year trade in February. The trade also brings CEB to 88% of its total funding programme for 2019.

The mandate for a USD 1bn (no grow) 3-year benchmark was announced to the market at 8:30 BST on Monday 16th September 2019, with IPTs of MS+12bps area announced shortly after at 13:51 BST. IOI’s grew steadily overnight and books were officially opened on Tuesday 17th September 2019 at 08:16 BST with a price guidance of MS+12bps area and IOI’s > USD 970mn. The transaction continued to gain good traction allowing a book update of > USD 1.35bn (incl. USD 50m JLM) and the spread to be set at MS+11bps at 09:34 BST, reflecting a 1bp tightening. By 12:00 BST books of > USD 1.4bn (incl. USD 50m JLM) were communicated to the market with books to close at 12:30 BST (Europe/Asia) and 08:30 EST (New York).

Books eventually closed with 39 accounts participating. The transaction was officially priced at 15:16 BST, with a coupon of 1.750%, a reoffer price of 100% and a reoffer yield of 1.750%. This transaction also priced incredibly tight on a spread to treasuries basis, at a final spread of 6.35bps.

The transaction witnessed particularly strong interest from Official Institutions who took up 43% of the total allocation, Banks accounted for 37% and Fund Managers/Insurance for 20%, highlighting CEB’s strong investor franchise globally. Investors were extremely diversified by region with EMEA taking the largest allocation at 60%, the Americas at 20% and Asia at 15%. 

Investor breakdown

By investor type
CB / OI: 43%
Banks: 37%
Fund manager/Insurance: 16%

By region
EMEA: 90%
Americas: 25%
Asia: 15%

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 (AA+ with Fitch Ratings, outlook positive, AAA with Standard & Poor's, outlook stable and Aa1 with Moody's, 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.

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