(Adds pricing details, distribution)
By John Geddie
LONDON, Jan 15 (IFR) - The European Financial Stability
Facility matched its own record for the largest supranational
bond issue on Wednesday, after receiving EUR12bn orders from
investors, said a bank managing the deal.
The eurozone bailout fund, rated Aa1/AA/AA+, printed EUR8bn
of a new 1.25% five-year bond, maturing January 2019, at a
spread of mid-swaps plus 7bp.
"The deal captured demand from a lot of bank treasuries, but
also central banks and hedge funds as well," said one banker
managing the debt sale.
The transaction - which is EFSF's first of the year -
matched the borrower's EUR8bn sale of a five-year bond last
April, the largest supranational bond issue on record.
It also puts the EFSF well on its way to issuing a planned
EUR34.5bn of medium to long-term debt this year.
The EFSF is committed to funding and refinancing bailouts
for Ireland, Portugal and Greece, while its permanent successor,
the European Stability Mechanism, is committed to funding a
bailout for Cyprus and a bank recapitalisation programme for
Spain, as well as any future bailouts.
The ESM plans to raise EUR17bn of funding this year.
HSBC, Morgan Stanley and RBS managed EFSF's latest deal,
originally marketing the bonds on Tuesday afternoon with initial
price thoughts of mid-swaps plus 9bp area, but later revising
formal guidance to plus 8bp area on Wednesday morning after
interest topped EUR5bn.
The final spread of 7bp was set after just over an hour of
book-building, with orders in excess of EUR8.5bn.
One lead bank said the new bond offered investors a slim 2bp
new issue premium, based on fair value calculations of mid-swaps
plus 5bp, taking into account where EFSF's outstanding bonds
were trading in the secondary market.
Final distribution was split between the eurozone 41%, rest
of Europe 4%, UK/Switzerland 15%, Asia 37% and other 3%. By
investor type, the split was central banks/official institutions
41%, banks 38%, asset managers/fund managers 15%,
insurers/pension funds 4% and other 2%.
(Reporting by John Geddie, Editing by Helene Durand, Sudip Roy
and Julian Baker)