August 29, 2017 / 2:14 PM / 2 years ago

UPDATE: EFSF targets duration bid

LONDON, Aug 29 (IFR) - The European Financial Stability Facility (Aa1/AA/AA) printed a new €2bn 23-year as it surpassed its funding target in long-dated notes for the second half of 2017.

The bonds were originally marketed at mid-swaps plus 8bp area, and pricing tightened for a print at plus 7bp. A lead said that came with a new issue premium of 4bp.

“The underlying market was not the easiest, with stocks massively off and macro noise around the likes of North Korea,” said the lead. “We marked the 2023s mid-swaps 4.5bp higher yesterday, so that has moved a fair amount. But the issuer took the view that they wanted to print price versus size.”

The order book finished in excess of €3.7bn, including €700m of lead interest.

“They went for a sector of the curve that hasn’t been accessed at all this year, and there was a lot of feedback that investors were interested in something around 20 years,” said the lead. “The question now is how much more longer-dated funding they require.”

The EFSF said in June it planned to raise around €9bn in maturities of 10-years and longer out of its €20bn needs for the second half of 2017. With today’s trade, it has now done €11bn in 10-years+ tenors.

Bank of America Merrill Lynch, BNP Paribas and HSBC were joint lead managers. DEAL STATISTICS Issue: EFSF €2bn 1.45% Sep 2040 23yr at MS+7 / 99.322 / 1.485% Pricing date: Aug 29 2017 Ratings: Aa1/AA/AA Leads: BAML/BNPP/HSBC Pricing steps: MS+8 area, MS+7 Book size: >€3.7bn (€700m JLM) NIP: 4bp Distribution: Eur 68%, UK/Switz 23%, RoEur 7%, Americas 2%. FM 51%, Bks 22%, Ins/PF 21%, CB/OI 6%. (Reporting by Robert Hogg)

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