NIB issues 2-year USD global benchmark, third in 2016
On 20 September, NIB priced a two-year global USD 1 billion bond, its third and final public benchmark of 2016, following successful outings in three-year in February and five-year in July.
Issued ahead of the Bank of Japan (BOJ) and Federal Open Market Committee (FOMC) meetings, NIB’s transaction was oversubscribed, which highlighted strong investor demand from the outset. NIB’s global benchmark was priced with a +21.7 bps spread over the 0.750% UST due August 2018, equating to a reoffer yield of 0.995%, and deriving a reoffer price of 99.763%.
The final book drew interest from 29 investors globally. In terms of investor type, central banks and official institutions accounted for 73% if the final allocations. Banks and treasury investors were represented with 20%. European investors accounted for the lion’s share with 79% of the distribution.
“The transaction is a very strong result from NIB ahead of the FOMC, with the tightest SSA USD transaction since July 2015. The top-quality orderbook highlighted the safe haven status of NIB and the issuer’s extensive following among global central bank and bank treasury investors”, says Asif Sherani, Director, SSA Syndicate at HSBC.
“Taking advantage of a stable market backdrop before two big central bank meetings, NIB once again demonstrates that it pays to stay nimble. The issuer priced its third successful USD benchmark of 2016 at the tightest spread to mid-swaps seen in the USD SSA market since the summer of 2015”, says Matthieu Batard, Executive Director, SSA Syndicate at JPM.
“2016 has proved to be a stellar year for NIB in the USD market, with the borrower making a rare third outing. As with the earlier three- and five-year deals, NIB was careful with this transaction to secure a balance of pricing”, says Spencer Dove, Managing Director, DCM Public Sector at Nomura.
“NIB is pleased to see the support of the international investor base in this two-year USD benchmark. We reached our target to have an oversubscribed and well diversified orderbook with very high quality investors. Pricing the bond with a spread of minus four to LIBOR meant we entered a somewhat untested spread area. Wider swap spreads helped us here as well, so we think the pricing was spot on for investors as well and we are confident that the deal will deliver good performance”, says Jens Hellerup, Head of Funding and Investor Relations at NIB.
See a joint press release on the bond transaction PDF here.
| Bond Summary Terms | |
| Nordic Investment Bank | |
| Rating: | Aaa / AAA (Moody’s / S&P) |
| Issue amount: | USD 1 billion |
| Pricing date: | 20 September 2016 |
| Settlement date: | 27 September 2016 |
| Coupon: | 0.875% payable semi-annually |
| Maturity date: | 27 September 2018 |
| Reoffer spread: | Mid swaps – 4 bps, UST 0.75% 08/18 + 21.7 bps |
| Reoffer price: | 99.763% |
| Reoffer yield: | 0.995% s.a. |
| Format: | Global |
| Joint lead managers: | HSBC, JPM, Nomura |
NIB is an international financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The Bank finances private and public projects in and outside the member countries. NIB has the highest possible credit rating, AAA/Aaa, with the leading rating agencies Standard & Poor’s and Moody’s.
For further information, please contact
Mr Jens Hellerup, Senior Director, Head of Funding and Investor Relations, at +358 961 811 401, mixIt(‘je’,’ns.hellerup’,’nib.int’,”,”,’1474448159252-1′);jens.hellerup (at) nib.int