NIB’s long two-year USD global benchmark receives strong investor support
On 6 September, NIB launched a long two-year USD 1 billion global benchmark bond. With over two-fold oversubscription and final orderbooks reaching USD 2.5 billion, the Bank was able to price the transaction 3 basis points inside the initial guidance, at SOFR MS+19bps. This is NIB’s second USD benchmark in 2023, and the Bank’s first two-year benchmark in US dollars since 2020.
The issue marks both one of NIB’s largest USD orderbooks ever and one of the tightest spreads over Treasuries from a supranational in recent history. It was backed by over 45 orders, including new investors, resulting in a geographically diverse and high-quality orderbook.
“New issuance markets are challenging to navigate – an inverted yield curve and uncertainties surrounding future Central Bank policies make issuance windows shorter and more crowded. By offering a slightly unusual maturity, NIB was able to differentiate itself from other supply while also offering additional value to yield-focused investors. Looking at the orderbook, I am delighted that we can conclude this year’s USD benchmark issuances with such strong investor support,” says Kim Skov Jensen, NIB’s Vice President & CFO.
“With this latest benchmark, we have deviated from our usual practice of issuing three- and five-year USD benchmarks annually. Our assessment was that the inverted yield curve between two and three years would attract yield-oriented investors to a shorter maturity bond. Additionally, from an internal Asset Liability Management perspective, this maturity aligns well with our objectives. The orderbook for this USD 1 billion benchmark reached USD 2.5 billion, with some sizeable orders from new investors. We are happy with the outcome and thank all investors and the banks involved,” comments Jens Hellerup, Head of Funding & Investor Relations at NIB.
In terms of investor participation, geographical distribution was mainly dominated by Asian Investors 52%, followed by Americas with 27% and EMEA with 21%. In terms of investor type, Central Banks and Official Institutions got the lion’s share with 86%, Banks took 9%, Asset Managers had 4% and Insurances and Pension Funds took the remaining 1%.
The joint lead managers of the transaction are Crédit Agricole CIB, Deutsche Bank and J.P. Morgan.
“Congratulations to NIB on another highly successful USD benchmark transaction. Attracting such a high-quality book, with over 85% of allocations to Central Bank and Official Institutions, is particularly impressive at such tight spreads to US Treasuries. This strong outcome once again demonstrates the attractiveness of the NIB signature in the USD market,” says Matt Dawes, Vice-President, SSA Syndicate, J.P. Morgan.
See a joint press release on the bond transaction
| Summary terms: | |
|---|---|
| Issuer: | Nordic Investment Bank |
| Rating: | Aaa / AAA by Moody’s / S&P |
| Issue amount: | USD 1 billion |
| Coupon: | 5.000% Semi Annual, Fixed |
| Launch date: | 6 September 2023 |
| Payment date: | 13 September 2023 |
| Maturity date: | 15 October 2025 |
| Spread: | SOFR MS + 19bps | UST 5% 08/25 +4.2bps |
| Issue price: | 99.868% |
| Issue yield: | 5.064% Semi-Annual |
| Listing: | Luxembourg Stock Exchange’s Regulated Market |
| Joint lead managers: | CACIB, Deutsche Bank and J.P. Morgan |
| ISIN: | US65562QBX25 |
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
Jens Hellerup, Senior Director, Head of Funding and Investor Relations,
at +358 961 811 401, jens.hellerup@nib.int
Angela Brusas, Director, Funding and Investor Relations, at +358 961 811 403, angela.brusas@nib.int
Alexander Ruf, Director, Funding and Investor Relations, at +358 961 811 402, alexander.ruf@nib.int