ICO launches first public bond issue of 2014, worth €1.25 billion with the lowest coupon ever

ICO launches first public bond issue of 2014, worth €1.25 billion with the lowest coupon ever

 

Demand was high among foreign investors, who acquired 51% of the bonds.

Instituto de Crédito Oficial (ICO) has launched its first public bond issue of 2014. Worth €1.25 billion, this is part of its GTMN (Global Medium Term Note) programme.

Aimed at institutional investors, the issue will pay a coupon of 1%, the lowest ever paid by ICO in its public euro issues. Barclays, BBVA, Deutsche Bank and HSBC were lead managers in this benchmark issue, which matures in September 2015.

The order book opened in the morning with an issue price of 15 basis points over the Spanish Treasury bond, the narrowest spread over the last four years.

Demand was high, reaching €1.5 billion, enabling ICO to set a final volume of €1.25 billion.

International investors played a significant role, following the trend seen in the final issues of 2013. 13% of the bonds were placed in Germany and 12% in Asia. .

Uptake among fund managers was the highest (45%), followed by banks (28%) and Central Banks (12%) while insurance companies and private banks took 9% and 6% of the paper respectively.

In 2013, ICO launched medium and long-term issues totalling €10.7 billion and plans to reach an issuance volume between €9 and €10 billion in 2014.