The European Investment Bank (“EIB”), the European Union’s long term financing institution, rated Aaa/AAA/AAA (Moody’s/Standard and Poor’s/Fitch), has launched its first floating rate note in Bulgarian leva (BGN).
The issue was launched under EIB’s Euro Medium Term Note programme and has a volume of BGN 150 million (approximately EUR 77 million) with an issue price of 100.00% The bond bears a coupon linked to the BGN 3M SOFIBOR and matures on 20 October 2009. The transaction is jointly arranged by Raiffeisen Zentralbank Osterreich AG (RZB) and Raiffeisenbank (Bulgaria) EAD.
Richard Teichmeister, Deputy Head of Funding in Europe (excl.ˆ) and Africa at the EIB, commented: “After the favourable reception for our first BGN issue in 2005 both by domestic as well as international investors, we saw an opportunity to widen the array of products offered to investors in the Bulgarian leva market with this Floating Rate Note. This issue is a testament to EIB’s commitment to responding to investor needs.”
Patrick Butler, RZB Board Member responsible for Treasury/InvestmentBanking and Financial Institutions& Sovereigns, said:“This is the
first ever international Floating Rate Note denominated in Bulgarian
Leva for the EIB. The RZB Group is delighted to sole-Lead-manage a
pioneering deal for this supranational Aaa/AAA/AAA-rated issuer. This is
not the first time we have opened up a new market in Central and Eastern
Europe with an imaginative, top-notch borrower like EIB, nor will it be
Summary terms and conditions for the new bondissue
|Issue Amount||BGN 150 million (EUR 76.7 million)|
|Pricing Date||25 September 2006|
|Settlement Date||20 October 2006|
|Maturity Date||20 October 2009|
|Coupon||BGN 3M SOFIBOR|
|Format||FRN issued under EIB’s EMTN programme|
Martin Grell, CFO of Raiffeisen International Bank-Holding AG, added:”We have a close co-operation with the EIB in Bulgaria on the funding
side of the business. The present bond shows that our subsidiaries have
also capacity to serve its partners in the capital markets.”
EIBfunding 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. EIB’s total borrowing plan for 2006 is EUR 50 billion, of which around EUR 37 billion have been raised year-to-date.
Background information on EIB
The European Investment Bank, based in Luxembourg, was set up in 1958under the Treaty of Rome. Owned by the European Union Member States, theEIB is the EU’s long-term lending institution, financing projects that promote European economic development and integration. Besides supporting projects in the Member States, its main lending priorities include financing investments in future Member States of the EU. The EIB operates on a non-profit maximising basis and lends at close to the cost of borrowing. The Bank’s consistent AAA rating is underpinned by firm shareholder support, a strong capital base, exceptional asset quality, conservative risk management and a sound funding strategy.
Background information on RZB
Raiffeisen Zentralbank Osterreich AG (RZB) is the central institution ofthe Austrian Raiffeisen Banking Group, the country''s largest bankinggroup. It is a leading corporate and investment bank in Austria and alsoconsiders Central and Eastern Europe (CEE) as its home market. Viasubsidiary Raiffeisen International Bank-Holding AG, it operates one ofthe leading banking networks in CEE with subsidiary banks and financeleasing companies in 16 markets. More than 11 million customers areattended to through more than 2,700 business outlets. In eight markets,the respective Network Bank ranks among the three largest local banks.Representative offices in Lithuania and Moldova complement the group''spresence in the region. Raiffeisen International''s shares are traded onthe Vienna Stock Exchange. RZB owns 70 per cent, the balance isfree-float.
RZB''s balance-sheet total amounted toˆ 103.2 billion at 30 June 2006, 10 per cent more than at year-end 2005. Pre-tax profit was up 34 per cent against the first semester 2005 and amounted to ˆ 579.0 million.