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EIB Enters Interest Rate Swap To Hedge Bond

20 Jul 2003

The European Investment Bank has entered an interest rate swap on an eight-year EUR100 million (USD111 million) Eurobond to make it a floating-rate liability. Jean-Erik de Zagon, senior capital markets officer, said, "We are required to hedge all of our bond issues to minimize risk."

In the swap, the EIB pays the fixed rate on the bond and receives a Euribor-based floating rate, which de Zagon declined to specify.

Merrill Lynch and Banca Akros were the book runners on the bond, and although de Zagon declined to name the swap counterparties he said it is usual for the book runners to execute the swap.

EIB is using the proceeds from the bond for general financing purposes. It currently has a strong focus on Eastern and Central Europe because these economies are growing strongly.

 

20 Jul 2003