When a sovereign surrogate attracts its biggest ever order book for its first 30-year euro deal, it proves that liability matching by pension funds and insurers is now a prime mover of the European capital markets, right? Well, up to a point.
The EIB launched its October 2037 deal last month. The Euro Area Reference Note (Earn) attracted e11 billion of orders.
"Behind the over-enthusiastic promotion of long-dated demand, the trade went well for old-fashioned reasons," says a banker close to the EIB. "Somewhere in their psychology, investors are trying to extend duration...
