CEB issues a US$1bn no-grow 1.375% Global Benchmark due February 2025

Transaction highlights

• Council of Europe Development Bank’s (CEB) first USD benchmark transaction of 2020
• The bond priced at CT5+6.70bps, the tightest spread to the reference US Treasury in this tenor from non-Sovereign issuer year-to-date
  
• CEB tightened by 1bps from Initial Price Thoughts ("IPTs") to price at MS+8bps, inside Fair Value and the joint tightest reoffer spread for a USD benchmark year-to-date
  

PARIS - On Thursday 20th February 2020, Council of Europe Development Bank (CEB), rated Aa1/AAA/AA+ (stab/stab/pos), priced a USD 1bn “no-grow” 5-year Global benchmark. The Joint Lead Managers on the transaction were BNP Paribas, BofA Securities, Deutsche Bank and TD Securities. The transaction represents CEB’s first USD Global outing of 2020, following a successful 10yr EUR transaction the month prior. The new benchmark extends CEB’s USD curve to 2025, offering investors a new liquid pricing reference.

Following a relatively quiet issuance period in the SSA market, CEB took advantage of favourable market dynamics and a clear issuance window ahead of potential competing supply to announce the mandate for their new USD Global benchmark.    

Initial Price Thoughts of mid-swaps ("MS") +9bps area were released alongside the mandate announcement at 3pm London time and investors were invited to reflect Indications of Interest ("IOIs") at that time.  In the interest of full transparency, a USD 1bn "no-grow" transaction was communicated to investors from the outset.

When books were officially opened the following morning at 8am London, IOIs were already in excess of USD 750m.  Momentum continued to build throughout the London morning, and just two and a half hours later interest from investors was in excess of USD 1.3bn.  The quality and granularity of the orderbook allowed CEB to set the spread 1bp tighter than IPT at MS+8bps.

The new CEB bond was priced at 2:55pm London at MS+8bps, equating to a +6.70bps spread vs the 1.375% UST maturing January 2025. This represents the tightest UST spread in this tenor for a non-Sovereign issuer in 2020.  It also represents the joint-tightest MS spread for a 5yr benchmark in 2020.

40 global investors placed orders in the transaction. The quality of the orderbook was exceptional as reflected in the final allocations, with 90% of the bond allocated to Central Banks, Official Institutions and high quality Bank Treasuries. 

Investor Distribution

By Geography
Europe 40.8%
Middle East 10.0%
Asia 34.1%
Americas 15.2%

By Investor Type
Bank Treasury/Private Bank 56.4%
Central Bank/Official Institution 33.6%
AM/Ins/Other 10.1%

Full technical details of the transaction