Overall Most Impressive SSA Funding Team: European Investment Bank
EIB has also won these additional categories:
Most Innovative SSA Issuer
Most Impressive Supranational Funding Team in Euros
Most Impressive Supranational Funding Team in Dollars
Most Impressive Issuer for Post-Libor Solutions
Most Impressive Supranational Funding Official
The European Investment Bank has had a long-standing and leading bond market franchise, but after reconfiguring its funding team in 2019 it has put in place a structure that readies it for future challenges.
It jettisoned the currency and geography-focused groupings that had served it so well in the past and introduced a product-focused approach under head of capital markets Eila Kreivi.
“We felt we needed a more focused approach, in particular on certain areas such as risk-free rates and sustainability products,” explains Sandeep Dhawan, head of benchmark funding.
Dhawan’s benchmark team is one of five pillars of the structure: it sits alongside public markets funding, headed by Nathalie de Weert; new products and special transactions, headed by Richard Teichmeister; sustainability funding, headed by Aldo Romani and investor relations, headed by Peter Munro.
For an issuer like EIB with a history of issuing large deals in both euros and dollars, it meant harmonising to some extent the way it approaches issuance across currencies. “We have a well-oiled machine,” says Dhawan. “All we needed to do was systematise our product concentration while ensuring that the currency-market approach remained as standardised, recognisable and predictable for investors as hitherto.”
While the relatively recent structure has successfully bedded in, its robustness was put to the test before too long. It wasn’t just a matter of dealing with running operations virtually amid the Covid lockdown, but showing that the approach would work in many different market environments.
It was apparent during Covid that EIB had lost none of its appetite for leadership. While ‘reopening’ is perhaps an overused word in the bond market, EIB’s move on March 23 to step forward with a €3bn three-year Earn was a genuine event.
“For choice, we would rather lead the way,” says Dhawan. “Sometimes that’s fraught, but that’s a risk we’re prepared to take because our franchise has the strength and resilience to take these steps, which hopefully help the market overall.”
EIB was again first-to-market after the summer break this year at a time of uncertainty about the impact of the looming entry of the European Union’s new €750bn Covid-response programme on sentiment and spreads.
“There is no obvious first mover advantage, when the market’s been in a lull and the landscape has changed, so once again we volunteered and had a reasonably decent outcome, thereby establishing a reference clearing level for further transactions to follow,” he says.
EIB’s win in the Post-Libor Solutions category is also testament to its market leadership, and the new special transactions team is designed to cement that role, whether that is in market innovations such as the introduction of risk-free rate products, or innovations that are still being developed such as blockchain.
EIB was first to market with its £1.5bn Sonia floating rate note in June 2018, and is the only institution to have issued a new reference rate bond in each of the big-three currencies, having issued both Sofr and euro short‑term reference rate deals. It worked hand-in-hand with the central banks and regulators, pushing forward the market development, says Xavier Leroy, senior capital markets officer, new products and special transactions.
“We wanted to do this, on one hand because it was our duty to help these public actors and on other hand because we believed we had the name recognition and expertise to help create a methodology and framework for the market to follow,” he explains.
It’s one element that helped EIB sweep the awards this year, but it has been the result of a team effort, says Richard van Blerk, deputy head of benchmark funding. “It shows that the new organisation has worked well across the different teams,” he notes. “It’s really pleasing that it is being recognised as working smoothly.”