14 Sep 2017

NIB issues second US Dollar global benchmark this year

On 13 September, NIB priced a new long three-year global transaction at mid-swaps -5 bps, equivalent to 16.05 bps over the three-year US Treasury benchmark bond. This is NIB’s second USD benchmark transaction of 2017 after the Bank issued a five-year transaction in January.

Given the continuing strong demand for USD sovereign, supranational and agency bonds, NIB took advantage of the positive market. The orderbook exceeded USD 1.375 billion, but the deal size remained capped at USD 1 billion.

The transaction was evenly distributed across a global investor base, with the Americas taking 34% and the EMEA and Asia regions 33% each. In terms of investor type, central banks and official institutions led the way taking 50% of the allocation, supplemented by strong support from fund managers, 24%, and banks 21%. Pension funds and insurance companies followed with 4% and other investors 1%.

“NIB always time their benchmark dollar deals to perfection, choosing windows where the strong underlying market dynamics complement the scarcity bid they always enjoy. Most impressive this time around was that the exceptionally tight spread versus US treasuries did not reduce either the size or quality of the order book”, says PJ Bye, Global Head of Public Sector Syndication at HSBC.

“NIB once again proved itself to be a responsive issuer, quickly taking advantage of constructive primary markets and has been deservedly rewarded with an excellent outing. The quality of the orderbook is of the highest order and the pricing serves as a testament to NIB’s credit standing in the USD Benchmark market”, says Mark Yeomans, Executive Director in Public Sector Origination at Nomura.

“With the five-year benchmark issued earlier this year, the new three-year transaction with the maturity date on 20 November 2020 served very well to diversify the investor base. We had been following the market since the summer break and saw the opportunity today to enter the market. With the fast gain in momentum and the deal reaching full subscription before it opened, we are very pleased with the transaction and how the international investor base continues to support NIB”, 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: 13 September 2017
Settlement date: 20 September 2017
Coupon: 1.625% semi-annual (long first)
Maturity date: 20 November 2020
Reoffer spread: Mid swaps - 5 bps, CT3 + 16.05 bps
Reoffer price: 99.952%
Reoffer yield: 1.640% s.a.
Format: Global
Joint lead managers: Bank of America Merrill Lynch, HSBC, Nomura, RBC Capital Markets

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,