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2026-01-09 17:38:25
[Record Demand for European Investment Bank's USD Bond Issuance, Market Confidence Rises with Focus on Longer Maturities] ⑴ The European Investment Bank (EIB) recorded over $42.5 billion in orders for its first USD benchmark bond issuance in 2026, setting a new record for the highest subscription volume in the history of this type of bond. ⑵ The $6 billion five-year bond was ultimately priced at the SOFR medium-term swap rate plus 32 basis points, narrowing by 3 basis points from the initial guidance, with a negligible new issuance premium. ⑶ The record order size is a positive signal for other supranational institutions preparing to issue USD bonds, but the real test for the market lies in the subsequent performance of the bonds in the secondary market. ⑷ Bankers pointed out that the spreads of USD supranational bonds issued last January did not tighten significantly after pricing, and secondary market trading prices generally fluctuated around the issue price. ⑸ Due to its predictability, liquidity, and strong secondary market performance, the EIB is considered one of the most sought-after issuers in the USD supranational bond market, and its strong demand was within market expectations. (6) Increased market confidence in the interest rate path is prompting issuers and investors to be more willing to accept longer-term bonds. This week, the Asian Development Bank and the Development Bank of Japan successfully issued 10-year USD bonds. (7) Current market sentiment contrasts with that of a year ago, when the market was more anxious about inflation. Now, increased certainty about the Fed's policy direction is supporting the issuance window for long-term bonds.
