Press Release - 24/10/2017 - ESM debuts in dollar market, raises $3 billion
THIS ANNOUNCEMENT RELATES TO AN OFFERING OF SECURITIES OFFERED AND SOLD PURSUANT TO RULE 144A AND/OR REGULATION S UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND IS ONLY DIRECTED AT QUALIFIED INSTITUTIONAL BUYERS UNDER RULE 144A OR PERSONS OTHER THAN U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) TO WHOM THE DISTRIBUTION OF THIS INFORMATION, WHETHER DIRECTLY OR INDIRECTLY, IS NOT UNLAWFUL.
Luxembourg – The European Stability Mechanism on Tuesday made its debut in the dollar market, raising $3 billion through the launch of a new 5-year bond.
“I am very happy with the successful launch of the ESM’s first-ever dollar-denominated bond after more than a year of preparations. Issuing bonds in dollars will allow us to broaden our investor base and spread our funding liquidity risk across the euro and dollar markets,” said Kalin Anev Janse, ESM Secretary General, and member of the Management Board responsible for Funding, Asset Liability Management and Lending.
“We have added a sizeable number of new investors to our books, for example from the Americas, which improved the geographical diversification of our investor base. This means we met our objectives with our first dollar trade,” Anev Janse said.
The ESM will run no currency risk through the deal, as it will swap the proceeds back into euros. The ESM will aim for a regular presence in the dollar market, with a minimum of one to two benchmark deals each year. The ESM plans to build up a limited dollar yield curve with standard two-, three- and five-year maturities. The euro will remain the ESM’s main funding currency.
The spread of the 2.125% bond was fixed at mid-swaps plus 10 basis points, for a reoffer yield of 2.201%. The order book was in excess of $7.25 billion. Citi, Deutsche Bank and J.P. Morgan were lead managers on the deal.
page source https://www.esm.europa.eu/
