Author(s): Anthony Williams
Date: 29 January 2013

The European Bank for Reconstruction and Development (EBRD, Aaa stable /AAA stable /AAA stable) successfully launched today a USD 1 billion seven-year Global bond issue, the borrower's first ever benchmark offering in this maturity.

This transaction responds to global investor demand for the highest quality fixed-income investments, against the continued overall flight to quality and the backdrop of appetite for yield and widening swap spreads at the time of announcing the trade.

Demand for the triple-A borrower's latest issue was significant at the indicated price of five basis points above mid-swaps, with no pushback on level from accounts. This enabled EBRD to price its deal flat to Asian Development Bank's 7-year Global Bond, flat to African Development Bank's 5-year deal and with only a small curve concession to IADB's 5-year Global Bond from earlier this year.

"This transaction is yet another affirmation of the high regard in which EBRD is held. We have recently received confirmation by the Rating Agencies of our AAA ratings and "stable" outlooks, which S&P, under its new methodology, has noted would also apply on a standalone basis. The evidence of this transaction demonstrates that investors continue to appreciate EBRD as a strong and stable credit" said the EBRD's Deputy Treasurer and Head of Funding, Isabelle Laurent.

The breadth and diversity of the order book, with an emphasis on the highest quality investors, suggest that many accounts continue to see value in Sovereign / Supranational / Agency assets of the calibre of the EBRD.

The transaction was announced during the course of the Asian morning, with books formally opening at approximately 8:00 a.m. UK time on Monday 28 January. The book built steadily to USD 700 million by the New York open, and closed at 3.45 p.m. UK time. Central bank and other official institutions played a key role in the transaction, with several Bank Treasuries also tempted further out the curve by the uniqueness of this high calibre issuer in this tenor (see distribution stats below).

This transaction was joint-lead managed by J.P. Morgan, HSBC, Morgan Stanley, and RBC Capital Markets.

The bonds were issued at a price of 99.496% and pay a coupon of 1.500% per annum, through semi-annual payments. This gives investors a yield of 1.575% (s.a.), equivalent to a spread of +20.1 basis points above the underlying US Treasury bond. Further bond details below:

Bond Details:

Amount: USD 1 billion
Settlement date: 4 February 2013
Coupon: 1.500% per annum, payable semi-annually
Maturity Date: 16 March 2020
Issue price: 99.496
Spread: +20.1 basis points over the underlying US Treasury (UST 1.125 due December 2019)
Interest payment dates: 16 March and 16 September
Listing: London Stock Exchange
Clearing systems: DTC, Euroclear or Clearstream

Joint Lead Managers: J.P. Morgan, HSBC, Morgan Stanley, RBC Capital Markets

Co Managers: BNP Paribas / Citigroup / Daiwa Capital Markets / Deutsche Bank / TD Securities

Investor Distribution:

By Geography

By Investor Type

Asia

53.3%

Central Banks/Official Institutions

54.0%

Americas

20.7%

Fund Managers & Insurance

9.6%

EMEA

26.0%

Banks & Private Banks

36.3%

Last updated 29 January 2013

Anthony Williams
Head of Media Relations - Tel: +44 20 7338 6997

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