US$1bn no-grow 2.50% Global Benchmark due February 2024

20 February 2019


Transaction Highlights

  • Council of Europe Development Bank’s (CEB) first US$ benchmark transaction of 2019
  • Extending CEB’s US$ curve, offering investors new point of liquidity for this rare credit
  • CEB tightened pricing by 2bps from Initial Price Thoughts to Launching @ MS+8, inside Fair Value         

On Wednesday 20th February 2019, Council of Europe Development Bank (CEB), rated Aa1/AAA/AA+ (all stable), priced a US$1bn “no-grow” 5-year Global benchmark, joint lead managed by Barclays, Citi, Deutsche Bank and Goldman Sachs International. The transaction represents CEB’s first US$ Global outing of 2019, following a successful outing in EUR. The new benchmark extends CEB’s USD curve to 2024, offering investors a new liquid pricing reference.

Following a strong week in the SSA primary markets post the Chinese New Year for single names of comparison, CEB announced the mandate for a US$1bn no-grow 5-year Global early on Tuesday 19th to secure an issuance window, in the expectation of competing supply.

Initial Price Thoughts (“IPTs”) of mid-swaps +10bps area were released at 11:30pm London time with the simultaneous collection of Indications of Interest (“IOIs”) after an early 08.00 Mandate announcement on the same day. With the stable background in the broader macro markets, the transaction garnered demand from the outset, especially from the Bank Treasury community, underscoring CEB’s status as a preferred liquidity credit for global investors.

With overnight Indications of Interest standing in excess of US$1.6bn (excluding JLM interest), the syndicate immediately set spread at mid-swaps +8bps early at 08.00 on Wednesday 20th.  The orderbook contained high quality official institution orders, thus it was announced that EMEA books would go subject already at 09.00hrs London with pricing in the NY session.

The new CEB 5-year Global was priced at 15:45hrs London at mid-swaps +8bps, equating to a +15.5bps spread vs the 2.50% UST maturing February 2024.

With very little price sensitivity in the orderbook despite the 2bps spread tightening, CEB gathered demand from a wide range of global investors, with over 43 separate orders and a book in excess of US$2bn. The quality of the transaction was underscored by the high proportion of Official Institutions (61.0%) and Banks (31.0%) tickets.

Investor Distribution

By Geography
Asia: 54.1%
EMEA: 38.3%
Americas: 7.4%

By Investor Type
CB/OI: 61.0%
Banks/Priv Banks: 31.0%
Insurance/Pension: 3.5%
Fund Manager: 2.5%
Other: 2.0%

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