Strong Demand for EIB’s First Benchmark Transaction of 2012

Release date: 06 January 2012 Reference: 2012-002-EN. On Thursday 5th January 2011, the European Investment Bank launched its first benchmark transaction of 2012 with a new 3-year Sterling benchmark maturing in January 2015. The new bond provides a current coupon 3-year presence and fills a gap in the GBP benchmark curve between the September 2014 and July 2015 issues. The issue was priced at a spread of 160bps over the UKT 4.75% due September 2015.

The orderbook was opened on Thursday at 9:00am UK time with a minimum deal size of GBP 300 million and price guidance of UKT 4T 15 +160bps area. The issue saw strong support from the outset, with orders growing to GBP 350 million by 11:00am. The book closed at 12:30pm London time, reaching in excess of GBP 450 million. It allowed EIB to price an upsized deal of GBP 450 million at the final spread of UKT 4T 15 +160bps, in line with original price guidance. The size achieved exceeds that achieved with new GBP fixed rate benchmark lines in 2011.

With 55 investors taking part, the issue attracted very broad interest. The transaction received a strong response from the UK real money community, taking 88% of the deal. In Europe ex-UK, French insurers and Swiss private banks were the most significant investors.

Composition of demand for the issue:

By Geographical Region	By Investor Type
UK - 88%	Fund Managers – 69%
France - 5%	Banks – 21%
Switzerland - 4%	Insurance – 7%
Middle East – 2%	Central Banks / Official Institutions - 2%
Other – 1%	Other – 1%

Eila Kreivi, Director and Head of Capital Markets at the EIB, said: “EIB’s first benchmark transaction of 2012 has been well received.  This sterling issue was in good size - larger than for our new GBP lines in 2011, and well diversified – with a particularly large number of investors participating.”

Adrien de Naurois, Director on Deutsche Bank's SSA Syndicate desk said: "The EIB has again shown great initiative and leadership in responding to investor appetite and identifying the best possible execution window for a new benchmark - quite an accomplishment in these volatile markets."

Lars Humble, Executive Director, SSA Syndicate Manager at Goldman Sachs said: “A great result for EIB’s first new fixed rate benchmark line of 2012. Against an extremely volatile market backdrop, EIB again proved its attraction to a wide range of investors; particularly pleasing was the take up from UK real money accounts, with around 50 separate tickets in the book.”

Kerr Finlayson, Director on HSBC's SSA Syndicate desk said: “A strong start to the year for EIB with their first benchmark of 2012. The decision to issue a new 3-year bond proved to be the right one, as the bulk of demand for AAA assets in the Sterling market has been focused at the front end of the curve so far this year. The orderbook was dominated by UK real money investors, highlighting EIB's status as an investment of choice in difficult times.”

Damien Carde, Managing Director, Head of FBG EMEA at RBS said: "EIB has issued with great success the first GBP supranational transaction of the year, highlighting its ongoing presence and strong understanding of the Sterling market".

For further information please contact:

Richard Teichmeister: +352 4379 86206 / Thomas Schröder: +352 4379 86214

Issue Amount	GBP 450 million
Pricing Date	5th January 2012
Payment Date	12th January 2012
Maturity Date	22nd January 2015
Annual Coupon	2.25% annual
Re-offer Spread	+160bps over UKT 4.75% due September 2015
Listing	Luxembourg Stock Exchange’s Regulated Market
Joint Lead Managers	DB / GSI / HSBC / RBS

Background information:

EIB in the Sterling market

The EIB has been an active participant in the Sterling market since 1977. It established a position as the leading Sterling issuer alongside the UK government, and holds the largest share of the Barclays Sterling non-Gilt Index (currently the EIB has a weighting of 8.6% in the Index). Its provision of a comprehensive and liquid yield curve, reaching out to 2054, is indicative of the Bank’s status and strategic approach. The Bank has a GBP dealer group, designed to develop a pricing policy aimed at providing a high degree of transparency and consistency.

EIB’s GBP (and EUR) are eligible collateral at the Bank of England and EIB GBP bonds are eligible instruments for sterling liquidity buffer purposes following FSA rules for UK banks.

Last year, the EIB was the largest issuer in the (non-asset-backed) Sterling non-Gilt market with a share of over 8%, raising GBP 6.8 billion.

EIB funding strategy and results

The Bank’s funding strategy combines a consistent and transparent approach with flexibility and innovation, both in terms of product and maturity. In 2011 the EIB raised EUR 76 billion. In 2012 the Bank plans to raise EUR 60 billion.

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JESSICA helps to revitalise six major cities in Bulgaria

Release date: 03 January 2012 Reference: 2012-001-EN. The European Investment Bank (EIB), in its capacity as the Manager of the JESSICA Holding Fund Bulgaria, has concluded an agreement establishing an Urban Development Fund with “Regional Urban Development Fund” (“UDF”) to invest in Urban Projects in six major cities in Bulgaria.

The UDF is established as a joint stock company by Societe Generale Expressbank, Elana Holding, Elana Investment and Balkan Advisors, namely the members of a Consortium led by Société Générale Expressbank, to invest approximately EUR 18.8 million of JESSICA funds and approximately an additional EUR 37.6 million of its own funds (in total EUR 56.4 million) in the next four years into urban projects located in the cities of Plovdiv, Varna, Burgas, Ruse, Stara Zagora and Pleven.

EIB Vice-President Wilhelm Molterer commented: “In addition to lending operations, the EIB provides professional expertise in the framework of the JESSICA initiative, an innovative instrument focused on a more efficient utilisation of EU Structural Funds, which aims to create revolving funds investing in sustainable urban development projects”.

On the basis of their specific experience and know how, the Consortium partners are expected to fulfil the main objectives of the UDF, namely to support sustainable urban transformation investments aimed at more competitive, socially inclusive and sustainable urban areas fostering better quality of life and welfare, as well as improved accessibility to basic public and private services. The JESSICA investment portfolio in the abovementioned six major cities may include projects with the following scope: rehabilitation of deprived urban areas, basic infrastructure works, energy networks and energy efficiency in the context of a wider urban development plan, etc.

The Ministry of Regional Development and Public Works (“Managing Authority”) established a JESSICA Holding Fund (“HF”) within EIB with the aim to deploying EU Structural Funds for revitalisation investments in city areas. The respective Funding Agreement was signed on 29 July 2010.

Societe Generale Expressbank (“SGEB”): one of the leading Bulgarian banks, subsidiary of the French Société Générale S.A. (“SG”), a major European financial services company with a substantial global presence. Following the SG policy on local markets, SGEB applies the model of universal commercial bank offering to its clientele the full range of banking services. SGEB implements modern banking practices and new technologies to service a wide range of clients, including individuals and liberal profession specialists, small and medium enterprises, large corporate and financial institutions. The long term issuer default rating assigned to SGEB is BBB+ with a positive long term rating perspective.

ELANA Holding: one of the largest non-banking financial groups in Bulgaria and Co-Fund manager of the Bulgarian Energy Efficiency Fund Initiative (“BEEF”). For the last seven years through BEEF, ELANA Holding has been successfully supporting local authorities/municipal administrations and public investments in the field of promoting energy efficiency activities by way of arranging bilateral and syndicated loans, guarantees and other financial products.

ELANA Investment: a leading Bulgarian expert in consulting enterprises and public administration on funding from EU & international donor Programs.

Balkan Advisors: an international investment consulting firm with experience in real estate, media and strategic consulting in Bulgaria and the Balkans.

Dušan Ondrejička d.ondrejicka@eib.org

For more information about Projects in Bulgaria see EASTERN EUROPE Projects

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Latvia Signature of the fifth Supplemental Memorandum of Understanding (SMoU) related to the EU financial assistance

EMO/11/943. Brussels, 21 December 2011. On 21 December 2011, a new Supplemental Memorandum of Understanding (the fifth SMoU) related to the EU financial assistance to Latvia was signed by Vice President of the European Commission Olli Rehn and the Latvian authorities. This follows a positive assessment by the Commission of the implementation of the economic adjustment programme. It is the last Memorandum under the Balance-of-Payments assistance programme with Latvia and it reflects the successful finalisation of the international assistance programme that is set to expire on 20 January 2012.

During the duration of the programme, from early 2009 to date, Latvia has made remarkable progress in overcoming the worst financial and economic crisis in its recent history. In spite of social hardship, periods of political change and an uncertain external environment, the country is now in a much sounder position: economic growth has resumed after the unprecedented fall in 2008 and 2009; inflation rates are much lower than before the crisis; the pre-crisis external imbalances have been greatly reduced; unemployment, that rose strongly during the crisis, is now steadily declining; access to international funding markets has been regained, though recent tensions in international capital and sovereign markets have added new challenges; and the fixed exchange rate has been preserved.

Signing of the Supplemental Memorandum of Understanding opens a possibility for a disbursement of up to EUR 200 million, which, however, the authorities intend not to request, given the current sound financial position of Latvia. Upon expiration of the programme in January 2012, Latvia will be subject to post-programme surveillance. The purpose of the post-programme surveillance is to ensure the capacity to repay EU assistance in the aftermath of the programme, by closely monitoring developments in a country, and to provide a framework for smooth phasing out of the programme, allowing consolidation of progress made under the programme.

For more information and the full text of the latest SMoU, see the link to the webpage on the Balance-of-Payment assistance for Latvia:

http://ec.europa.eu/economy_finance/eu_borrower/balance_of_payments/latvia/latvia_en.htm

http://ec.europa.eu/latvija/news/financial_assistance/index_lv.htm

For information about Projects in Latvia see NORTHERN EUROPE Projects 

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