The FINANCIAL — On 26 July 2016, NIB priced a new five-year global USD 1 billion benchmark. This is NIB’s second USD benchmark transaction this year and it takes the to-date figure of the Bank’s annual funding to EUR 4.3 billion.
Given the strong demand, the order book exceeded USD 2 billion shortly after the announcement on Tuesday morning. The high quality of the demand and the capped deal size of USD 1 billion allowed setting the spread at MS + 17 bps.
The transaction enjoyed a broad distribution across both geographies and investor types with almost 50 investors participating. The Americas accounts led the way taking 52% of the final allocation. Asia accounted for 25% and EMEA for 23%.
In terms of investor type, bank and treasury investors with 56%, central banks and official institutions with 27% and asset managers and fund managers with 15% dominated the final allocation, according to NIB.
“NIB has responded exceptionally well to market conditions here and provided exactly the right product for this market. As a result, they have been rewarded with the tightest SSA (sovereign, supranational and agencies) 5-year to swaps since their own 5-year benchmark in September last year that has a fantastically high quality and well diversified orderbook”, says Adrien de Naurois, Managing Director, SSA Syndicate at Bank of America Merrill Lynch.
“With a potentially challenging autumn ahead of us, we wanted to take advantage of a strong market, before everything slows down for the summer break. The recent widening of the swap spread in USD placed us in untouched price territory, but with an order book of over USD 2 billion we are confident that we will see performance in the bond, which is one of the goals we have with this transaction. We are again very happy to see the continued support international investors show towards NIB”, says Jens Hellerup, Head of Funding and Investor Relations at NIB.