Background

IBEC has added Eastern European bonds to its "Development portfolio"

International Bank for Economic Co-operation has replenished its treasury portfolio with securities from Central European issuers. The bank took part in bond issues of the Slovak Všeobecná úverová banka (VÚB) and the Czech gas distribution company Czech Gas Networks Investments. Both issuers meet the criteria allowing their securities to be included in the “Development portfolio” of IBEC – their activities contribute to maintaining a stable social and economic infrastructure in the member countries of the Bank.

During the initial offering, IBEC bought ten-year bonds of the gas company. The total amount of the issue was EUR 500 million. The company is the largest national gas operator with a market share of 78%. The stable position of the company is supported by the cash flow from the long-term system of tariff regulation for servicing loans. International ratings of the issuer are at BBB/BBB+ (Fitch/S&P).

VUB Bank is the second largest Slovak bank and is part of the international financial group Intesa Sanpaolo. International rating by Moody's – Aa2. As an additional guarantee for investors, a special cover pool is formed, in which the quality of assets is controlled by the National Bank of Slovakia. VUB Bank is actively present on the debt market – this is the 29th placement, the total volume of five-year bonds is EUR 3.1 billion.

Both placements aroused great interest from investors, oversubscriptions exceeded the announced volume by more than two times for each issue. The yield on Czech Gas was 0.895% based on the placement results, the Slovak bank's bonds were placed with a negative yield of 0.225%.

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