Two-year issue for amount of EUR 44m / EGP 300m carries 6.50% coupon
Synthetic format with payments in EUR linked to EUR/EGP exchange rate
Longest outstanding synthetic EGP issue
Provides platform for issuance in the Egyptian domestic market
The European Investment Bank (EIB), the EU's long term financing institution, rated Aaa/AAA/AAA (Moody's/Standard & Poors/Fitch), today priced its first ever issue linked to EGP (Egyptian Pound).
This bond issue matures 6 March 2008, making it the longest dated outstanding synthetic EGP bond. The issue is for an amount of EUR 44m / EGP 300m and carries a coupon of 6.50%, which is payable in EUR based on a formula linked to the EUR/EGP exchange rate. The issue is priced at 100.00%. The transaction was joint-lead managed by Barclays Bank and Banca Profilo.
The issue represents the establishment of a new benchmark in the Egyptian pound market, being the longest outstanding synthetic EGP issue and responds to demand from international investors. For the EIB it represents a stepping-stone towards its objective of establishing a presence on the domestic capital markets in Egypt, a continuation of EIB's policy of building its presence in selected developing capital markets particularly those of the European Union's partner countries in the Mediterranean region that benefit from the EIB's Facility for Euro-Mediterranean Investment and Partnership (FEMIP). The FEMIP program seeks to support EU development and cooperation policies in the Mediterranean region.
Comments from EIB and the Lead Managers on the Bond Issue:
Philippe de Fontaine Vive, EIB's vice-President with responsibility for Finance as well as the FEMIP countries, said: "An efficient and liquid capital market is an important ingredient for economic development and for this reason EIB is seeking to take a leading role in the development of the domestic capital markets in the Mediterranean region where the EIB is an active lender through its Facility for Euro-Mediterranean Investment and Partnership (FEMIP). Access to the domestic capital markets will also add to the Bank's range of lending instruments in these countries."
EIB's David Clark, Head of Funding for Europe (exc. EURO), Mediterranean and Africa, said: "This is EIB's first issue denominated in EGP. The Bank is actively researching the domestic Egyptian market and sees this as a precursor to issuance in the domestic market. This issue is a significant contribution to EIB's strong track record of providing innovative alternatives for investors - in this case by extending the Bank's presence in Africa with another new currency."
Barclay's Heather Day, Head of Frequent Borrowers Origination commented: "We are very pleased to have structured the first EGP-linked product for a third party issuer with such a strong credit and name recognition as EIB. This reinforces the place of EIB as a leading borrower in the debt capital markets and especially in Emerging markets currencies. With this transaction EIB continues to extend the Euromarket in Africa with a new currency."
Banca Profilo's Giuseppe Distefano, Head of Fixed income, said "As a bank with a strong Mediterranean outlook we are keen to explore opportunities in this area. We are happy about the deal and the opportunity the EIB has given us to jointly open the doors to this new market."
EIB funding 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. Under its 2005 funding program the Bank raised EUR 50 billion in 15 different currencies. The Bank's three core currencies (EUR, GBP, USD) accounted for 88% of funding. In 2005 the Bank also pre-funded part of its 2006 program, which is expected to amount to up to EUR 55 billion. Year-to-date, The Bank has raised over EUR 12 billion under its 2006 program.
Profile of EIB
The European Investment Bank, based in Luxembourg, was set up under the Treaty of Rome in 1958. 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.
The Bank's shareholders are the member states of the European Union. The primary focus of EIB's lending activities is to finance projects that promote balanced regional development and economic and social cohesion in an enlarged EU. The Bank's other lending priorities are as follows:
Implementation of the Innovation 2010 Initiative (i2i): this program is designed to support the development of a knowledge-based, innovation driven economy
Development of Trans European Networks, in the fields of energy, telecommunications and transport
Environmental protection and improvement
Support for the SME sector in the EU
Support of EU development and cooperation policies with Partner Countries, in particular through the Facility for Euro-Mediterranean Investment and Partnership (FEMIP) and the Cotonou Agreement focusing on African, Caribbean and Pacific countries
The majority of the Bank's outstanding loans have been for infrastructure projects, with the largest share taken by transport projects. Other key areas of infrastructure lending have been the energy, water and telecommunications sectors. Apart from infrastructure, other areas of lending have included global loans, involving lending via financial intermediaries, as well as loans to industry, healthcare, education, services and agriculture.
Helen Kavvadia
Principal Communications Officer for Greece and FEMIP
European Investment Bank
posted by The visioner @ 5:40 PM
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