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By Natalie Harrison and John Geddie
LONDON, May 30 (IFR) - The European Investment Bank (EIB), rated Aaa/AAA/AAA, has opened books on its fourth benchmark dollar of the year, and its second with a three-year maturity, banking sources managing the transaction said on Wednesday.
Lead managers Bank of America Merrill Lynch, Deutsche Bank and HSBC have set guidance on the long three-year bond maturing in July 2015 at mid-swaps +32bp.
One banking source said the new issue premium was around 5bp. The bond is being priced off the issuer’s existing 1.125% April 2015 bond, the company’s last three-year dollar deal which priced in February, which is bid at around 26bp over mid-swaps, according to Tradeweb data.
The borrower has led the way in a huge front-loading campaign by sovereign, supranational and agency borrowers this year as issuers have taken advantage of more favourable market conditions in the first quarter to lock in funding.
The EIB has already completed more than 65% of its EUR60bn funding target for 2012.
Its last benchmark deal in dollars was in March when it sold a USD3bn five-year bond maturing in June 2017. The deal attracted a strong order book of USD5.3bn at the time and offered reassurance that the issuer’s heavy supply had not dampened investor appetite for its bonds.
The 1.625% June 2017 bond, which printed at mid-swaps plus 33bp via Barclays, BNP Paribas and JP Morgan came roughly flat to the issuer’s curve but has since widened to around 56bp over mid-swaps according to Tradeweb data.
The spread in swap terms on that deal was less than half of that paid by the borrower on its inaugural dollar deal of the year in January, USD3.5bn March 2017 bond, which priced at mid-swaps plus 70bp with a 20bp new issue premium. (Reporting by Natalie Harrison and John Geddie, editing by Alex Chambers)