LONDON, Oct 1 (Reuters) - The European Investment Bank is taking indications of interest from investors for the first major debt sale linked to the ECB’s new interbank lending rate ESTR, banks managing the deal said on Tuesday.
The deal from the EIB, the European Union’s main lending arm, marks a key step in regulators’ efforts to move away from the scandal-hit LIBOR benchmark as the euro short-term rate, or ESTR for short, is seen as the biggest change for market plumbing since the introduction of the euro two decades ago.
The EIB’s three-year bond is expected to raise around 1 billion euros, according to bankers involved with the transaction.
Pricing is expected on Wednesday, when the first quote for the ESTR rate will be published by the European Central Bank.
Initial price thoughts for the bond are 12 basis points area over the ESTR rate, according to documents seen by Reuters.
The EIB is frontrunning issuance linked to ESTR after it led the way on debt sales linked to SONIA, the Bank of England’s replacement rate for sterling Libor. (Reporting by Yoruk Bahceli; editing by Sujata Rao )