Nordic Investment Bank (NIB) came to market early in December with a well-received $1 billion dollar benchmark. But with relatively small funding needs, it is certainly not about to commit itself to a regular issue of big deals. Not having a regular programme may mean more work for Kari Kukka, head of funding, and his team when a deal does come to market. The last deal seems to have taken a lot of effort, even by the labour-intensive standards of AAA issuers. He says: “Before the deal we were on roadshow for three-and-a-half weeks – a week in North America, and another in Asia. It was fairly exhausting but valuable.”
And at the end of January he was due to take off again on a trip taking in Tokyo, London and several US cities.
Kukka explains: “Last year our funding target grew to e3.3 billion, letting us do our benchmark issue, thus combining the existing global flexible strategy with a strategic global issue to further diversify NIB’s investor base. This year our needs will be between e3 billion and e3.5 billion but we don’t make any promises to come to the market. Any issuance depends on relative cost and existing funding possibilities.”
So any follow-up to the latest benchmark could be in either global or Eurobond format, depending on what investors want.
New Taiwan dollars have been a particularly strong source of demand for NIB, with 25 small issues in 2002 alone. “Most of the supras have been fairly active in Taiwan dollars. It’s often the case that supras open up local markets, and other issuers follow. We were the first to issue in Singapore dollars at 10 years, for example, and now we haven’t been back to that market for a few years.” Kukka hopes Taiwan stays attractive a while longer though. When Euromoney spoke to him, he was in the process of executing a NT$3 billion (US$87 million) deal. Inflation-linked bonds are another possibility for 2003. Kukka says, too, that a maturity of between five and 10 years is likely to be good for demand from central banks.
Again, as one of the smaller supranationals, NIB isn’t in competition with KfW, the EIB and Freddie Mac and wouldn’t try to be. “The investors I have spoken to seem perfectly happy with the liquidity of a $1 billion issue,” says Kukka.
