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PRESS RELEASE

BEI/12/16

26th January 2012

Strong demand for rare new 25-year GBP bond

  • New GBP 600m 25yr issue larger than new lines in 2011 and 2012 ytd

  • Well diversified order book with 32 real money accounts participating

  • Fills gap in EIB GBP benchmark curve

On Thursday 26th January, the European Investment Bank (EIB), rated Aaa/AAA/AAA (st/-/cw-), issued a new £600m 25-year bond due 8th June 2037. This is EIB’s first new long dated sterling line in 2012, the longest Supranational or Agency sterling issue of the year, and the largest EIB Sterling issue with maturity over 20 years since February 2009.

EIB mandated HSBC and RBS on the 25th January to lead-manage the transaction. Books were opened on the morning of the 26th, with immediate response from investors, following strong indications of interest. On the back of strong feedback and continued momentum, the book was upsized from an initial target level of £300m to £600m, with books closing at 12:30 London time. The final order book was in excess of £650m.

The bond priced at UKT 4.25% March 2036 +95bps and has a coupon of 3.875%. The attractive yield level was a key source of appeal for investors. The bond attracted 32 investors, mostly UK real money investors. Almost all orders were on a cash basis and at re-offer. Asset managers (54%) together with insurers (36%) dominated demand, while banks (10%) also placed significant orders.

Composition of demand for the issue:

By Geographical Region

By Investor Type

UK

98%

Asset managers

54%

Europe ex-UK

2%

Insurance

36%

Banks

10%

With this issue, EIB has raised over EUR 16 billion or 27% of its target of EUR 60 billion in 2012.

Comments on the issue:

Eila Kreivi, Director and Head of Capital Markets at the EIB, said: “Long dated sterling investors have now echoed the strong bid for EIB seen in other sectors and currencies this year. It is the largest new EIB GBP issue since 2009 Investors have recognised the historically attractive value, and are seizing the opportunity, especially as spreads have tightened since the start of the year.”

Kerr Finlayson, Director on HSBC's SSA Syndicate desk said: This was an important trade for EIB and for the broader market. EIB has demonstrated that it can fund at the ultra-long end of the curve, in what is its longest new benchmark in any currency since 2007. The investor base was also very impressive, attracting interest from a who's who of UK real money investors.

Damien Carde, Managing Director, Head of FBG EMEA at RBS said: "This transaction marks the long awaited return of the European Investment Bank at the long end of the Sterling SSA Market. UK investors have been starved of high quality paper and it was very clear to RBS that the pent up demand for a long dated EIB new issue would guarantee a swift execution at a level satisfying to both investors and the issuer. The European Investment Bank has once again proven the depth and strength of its customer base by printing £600m with a book building period inside 3 hours and a distribution of the highest quality in the UK real money world. Very few issuers are capable of such an achievement."

For further information please contact:

Richard Teichmeister / Thomas Schröder: +352 4379 86220

Summary Terms and Conditions for the new Bond Issue

Issue Amount

GBP 600 million

Pricing Date

26th January 2012

Payment Date

7th February 2012

Maturity Date

8th June 2037

Annual Coupon

3.875% annual act/act

Re-offer Spread

UKT 4.25% March 2036 +95bps

Listing

Luxembourg Stock Exchange

Joint Lead Managers

HSBC and 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) issues 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.

Background information on EIB

The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. The Bank’s strong credit standing is underpinned by exceptional asset quality, a strong capital base, firm shareholder support, conservative risk management and a sound funding strategy.

ENDS


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