The FINANCIAL — The European Bank for Reconstruction and Development (EBRD, Aaa/AAA/AAA) successfully launched a USD 1.5 billion Global bond issue, the Issuer’s third USD benchmark since the beginning of the year, and follows on from their USD 1.5bn 3-year in June.
Encouraged by a positive global market backdrop following positive COVID-19 vaccine news and strong momentum in the primary markets, EBRD accessed the market swiftly to price the tightest 5-year SSA USD transaction versus mid-swap in 18 months.
The mandate for a new USD 1bn 5-year transaction was announced on Tuesday 17th November at 2pm UKT with Initial Pricing Thoughts of MS+8bps area. Indications of Interest built steadily throughout the US day and into the Asian session, reaching over USD 1bn by the time books formally opened at 8.25am UKT.
Interest from investors continued to grow throughout London morning surpassing USD 1.75bn by 10:15am UKT, enabling the spread to be set at MS+7bps, one basis point tighter than Initial Pricing Thoughts. The deal was upsized to USD 1.5bn on the back of high quality interest, with final orders in excess of USD 1.9bn (including USD 50mn of Joint Lead Manager interest).
The transaction attracted impressive demand from global Central Banks / Official Institutions who took 61% of allocation. Geographically the distribution was diverse across Asia (50%), Americas (34%) and EMEA (16%). In total over 75 investors participated in the transaction.
This transaction was joint-lead managed by Citi, Daiwa, J.P. Morgan and Scotiabank.
The bond was issued at a reoffer price of 99.867% and pays a coupon of 0.5% semi-annually. This gives a re-offer yield of 0.527%, equivalent to a spread of +13.45 bps above the current 5-year US Treasury.