EIB expands fundraising with two new bonds

The European Investment Bank (EIB), the multi-government-owned financing arm of the European Union, has launched two new bonds, a multinational environmental bond and its first rouble-denominated issue.

The five-year EPOS 2 (European Public Offering of Securities) bond, announced yesterday, will be the first to be offered to retail and institutional investors in all 27 EU member states. The return at maturity will be based on 75–85% participation in the newly created FTSE4Good Europe 40 index, which includes companies from FTSE’s existing FTSE4Good Europe index that have been rated ‘best practice’ for environmental impact.

The bond also gives investors the buy-to-destroy option of converting any return over 25% into carbon credits through the European Emissions Trading Scheme (ETS). Aldo Romani, the EIB’s deputy head of euro funding, explains: “The idea is to say ‘you will have the same return as from a basket of European governments, and beyond that you can choose to be responsible’.”

Today, RBC Capital Markets has priced EIB's first rouble-denominated bond, raising 2 billion roubles (€57 million) from European institutional investors with the issue in Luxembourg. The fixed-rate bond pays 6.75% with a ten-year maturity – the first ten-year rouble bond to be launched in Russia.

Stephen Dirou, of RBC Capital Markets' emerging market syndication group, said: "Russia is one of the few emerging markets with a normal yield curve – a lot of the others are heavily inverted... because they have short-term inflation fear priced in. This deal can offer a very attractive yield."