31 Mar 2020

NIB issues inaugural Response Bond

On 30 March 2020, the Nordic Investment Bank issued its first, EUR 1 billion NIB Response Bond due April 2023. The proceeds of the bond will be used to finance projects that alleviate the social and economic consequences of the COVID-19 pandemic in NIB’s member countries.

NIB’s owners have invited the Bank to provide support to its member countries and companies during the crisis caused by the coronavirus outbreak. NIB will increase its lending to this effect, and NIB Response Bonds are dedicated to finance such loans.

Eligible projects for financing with the Response Bond proceeds will mainly promote the efficient operation of healthcare systems, and provide financial support and labour market solutions to alleviate frictions to supply chains.

The orderbook reached above EUR 3.2 billion with more than 80 investors in three hours, enabling the transaction to price 3bps tighter than initial guidance. This represents the largest-ever orderbook for a EUR benchmark from NIB. The spread was set at MS+6bps.

“Swift and bold actions are needed to alleviate the effects from the pandemic, and NIB’s Governors have urged the Bank to increase lending to businesses affected by the crisis in the region,” says Lars Eibeholm, Head of Treasury at NIB. “The NIB Response Bond is our first reply to raise funding and back these actions. The Response Bond framework supports us in providing transparency and in communicating a clear strategy to investors and stakeholders.”

“NIB has perfectly responded to the need of the hour with the first ever ‘Response bond’ under its new 'NIB Response Bond Framework'. NIB read the markets very carefully and acted quickly to take advantage of the favourable sentiment. The scale and quality of participation are a testament to the support NIB has from the investor community. Congratulations to the team on this landmark transaction!” says Matt Dawes, SSA Syndicate, J.P. Morgan

“It’s great to see the Nordic Investment Bank acting so swiftly to step-up and respond to the COVID-19 crisis by issuing their inaugural ‘Response Bond’ with use of proceeds dedicated to lending to companies dealing with the serious consequences caused by the pandemic. A great result for the Nordic Investment Bank and a fantastic outcome for the Nordic region. Danske Bank is proud to have supported the Nordic Investment Bank on this important transaction,” says Gustav Landström, Global Head of SSA Origination at Danske Bank.

In terms of the geographical breakdown, orders were well distributed with Benelux investors taking 19%, 12% to Nordics, 6% to France, 4% to the UK, 32% to other Europe, 21% to Asia, and 6% to various other countries.

In terms of type of investors, Central Banks/Official Institutions accounted for 58%, Banks 24%, Fund Managers 12%, and Pension Funds, Insurance & Corporates 6%.

See a joint press release on the transaction.

For more information on the use of proceeds, see the NIB Response Bond Framework (PDF)

 

Bond summary terms

Issuer: Nordic Investment Bank
Rating: Aaa / AAA by Moody's / S&P
Issue amount: EUR 1 billion
Coupon: 0%, Fixed, Annual, Act/Act (ICMA)
Launch date: 30 March 2020
Payment date: 06 April 2020
Maturity date: 06 April 2023
Re-offer spread: MS +6bps I OBL 0 04/23 #177 +48.7bps
Joint lead managers: BNP Paribas, Danske Bank (B&D), HSBC, JP Morgan
ISIN: XS2152308644

 

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, jens.hellerup@nib.int