On Tuesday 14th October, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (“FMO”), the bilateral development bank of the Netherlands, rated AA+ (stable outlook) by S&P and AAA (stable outlook) by Fitch, successfully priced a USD 500m 5-year RegS FRN benchmark at 3m USD Libor + 14bps.
This transaction is FMO’s second USD benchmark of the year following another largely oversubscribed USD 500m 3yr FRN issue launched in June 2014. Due to limited annual funding needs, FMO are usually committed to issuing one USD 500m benchmark per year to serve the fixed income investors community and build a liquid curve. However, given expected increased funding requirements for next year, the issuer has decided to take advantage of good market conditions and issue a second USD benchmark as pre-funding for next year.
The mandate was announced on Tuesday 14th October 2014 in the early morning and books opened at 8:15am with an initial guidance of 3m USD Libor + 15bps area. The order book grew rapidly and was in excess of USD 500m at mid-day in Europe.
Demand continued to grow after the opening of the US market. Books were closed quickly after at 9am NY time, when approaching USD 650m, enabling the joint lead managers to set the spread at 3m USD Libor +14bps.
The USD 500m 5yr FRN transaction was priced at 3m USD Libor + 14bps at 3:30pm London time / 10:30am NY time on Tuesday with a final orderbook of USD 615m, comprised of top quality accounts and a good level of granularity with more than 25 investors allocated.
The distribution was very well supported by Central Banks and Official Institutions (72%), followed by Bank Treasuries (17%), Investment Managers (6%) and other (5%).
The geographical breakdown was well balanced between Europe (43%), Middle East & Africa (37%) and Americas (20%).
Summary of terms and conditions
Issuer Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V.
Format FRN, Reg S
Issuer ratings AA+ Stable (S&P) / AAA Stable (Fitch)
Size USD 500 million
Coupon 3m USD Libor + 14bps
Launch date 14th October 2014
Settlement date 21st October 2014
Maturity date 21st October 2019
Reoffer price 100%
Denominations USD 1K
ISIN XS1124401511
Joint-Bookrunners Daiwa Capital Markets Europe, J.P.Morgan, Rabobank International
