FRI 22 JAN, 2021-theGBJournal- On Thursday, 21st January 2021, the European Bank for Reconstruction and Development (EBRD), rated Aaa (stable) / AAA (stable) / AAA (negative), successfully issued a USD 2 billion 5-year fixed rate note at MS+3bps.
The new bond, which matures on the 28th of January 2026, pays a coupon of 0.500% and priced at a reoffer price of 99.700%. The transaction size, at USD 2 billion, represents EBRD’s largest ever USD benchmark transaction.
Barclays, BMO, Goldman Sachs and TD Securities acted as Joint Bookrunners.
The bond proceeds will be utilised for general capital purposes, which will include EBRD’s response to the COVID-19 pandemic. EBRD has announced a comprehensive EUR 21 billion Solidarity Package of response and recovery measures for 2020-2021, which includes a EUR 4 billion Resilience Framework.
Amidst a positive market backdrop, EBRD announced the mandate for a 5-year USD benchmark at 08:00 GMT on Tuesday, 19th January. On Wednesday, 20th January at 12:00 GMT, the deal was marketed with initial pricing thoughts (“IPTs”) of MS+5bps area.
At 7:44 GMT the following morning, the Joint Lead Managers opened books, revising guidance 1bp tighter and with IoIs in excess of USD 1.5 billion. The orderbook developed quickly over the course of the early morning session, growing to over USD 2.25 billion by approximately 09:41 GMT at which point the spread was set at MS+3bps.
The orderbook continued to grow and at 14:36 GMT the transaction was launched at USD 2.00 billion, facilitated by the high quality of the orderbook, with the final demand in excess of USD 2.4 billion.
Terms of the transaction
Issuer: European Bank for Reconstruction and Development (EBRD)
Rating: Aaa / AAA / AAA (stable/stable/negative) (Moody’s / S&P / Fitch)
Documentation: Issuer’s Global MTN programme
Format: Global SEC exempt
Issue Amount: USD 2,000,000,000
Pricing Date: 21st January 2021
Settlement Date: 28th January 2021 (T+5)
Maturity Date: 28th January 2026
Coupon: 0.500% Fixed, SA, 30/360
Spread vs MS: MS+3bps
Spread vs UST: CT5+11.2bps
Reoffer: 99.700% / 0.561%
Documentation: Issuer’s Global Medium Term Note Programme
Target Market: Professional Clients, Eligible Counterparties & Retail (all distribution channels)
Joint Bookrunners: Barclays, BMO Capital Markets, Goldman Sachs International (B&D), TD Securities