The social development bank in Europe

Funding

The Bank receives no aid, subsidy or budgetary contribution from its member states to finance its activities. The necessary resources are therefore raised on the international capital markets in the form of borrowings.

For its borrowing activity, the Bank has been rated by Moody's since 1988, by Standard & Poor's since 1989 and by Fitch Ratings since 1996. It enjoys the rating Aa1 – stable outlook by Moody's on its principal long-term debt, S&P AA+ – stable outlook and AA+ by Fitch Ratings with a stable outlook. On its short-term debt the Bank is rated P-1 (Moody's) / A-1+ (Standard and Poor's) / F-1+ (Fitch Ratings).

To ensure that it maintains access to the funds needed to pursue its activities, the Bank continues to have recourse both to large-scale borrowings in major currencies, aimed at a broad range of institutional investors, and to issues in given currencies or with specific structures corresponding to more particular requirements.

The CEB currently uses four bond issue programmes.

Bond issues

In 2015, the Bank borrowed a total amount of € 3.05 billion, broken down into six funding operations, including two new re-opening transactions of existing lines, with maturities of 1 year or more. This amount is similar to the funding volume in 2014, which stood at € 3.42 billion, and fulfilled three main objectives: to cover the requirements arising from the Bank’s lending activity, to enable the Bank to honour its debt maturities, and to enable the Bank to maintain liquidity at the level set by the Administrative Council.

57.4% of funds raised in 2015 were denominated in euros, 29.3% in US dollars, 13.3% in British pounds.

The average maturity of the issues launched in 2015 was 7.1 years, compared with 6.9 years in 2014. 100% of the issues carried out under the borrowing programme had a final maturity of close to five years or more, as was the case in 2014, in an effort to ensure the refinancing of the Bank's loans and avoid cash gaps in the coming years.

Bond Buyback Policy

In response to inquiries received from its bondholders, the CEB has adopted a buyback policy. The lead managers of CEB bonds are requested to maintain a two-way liquid secondary market. Nevertheless, the Bank considers the buyback of its debt as a service to investors when two-way quotations are not available for a given bond.

Buyback transactions occur mainly in the case of non-benchmark issues such as private placements and structured notes. Upon an investor request for a predefined nominal amount, the CEB will quote a price at which it is willing to repurchase the specific bonds on a best efforts basis. Buybacks can be for the total outstanding nominal amount of an issue or for part of it.

The CEB cancels the repurchased bonds as soon as the transaction is concluded and informs the relevant market participants of the new outstanding amount of the bond issue.