January 09, 2008 |
|A big offering by European Investment Bank is attracting a lot of attention and could trigger a domino effect.|
In a potentially encouraging development for the global credit markets, European Investment Bank plans to sell at least $4 billion in three-year global bonds. Demand has been very strong, with orders already exceeding $7 billion.
Because there is so much turmoil in the credit markets and many issues are being pulled due to an inability to sell, when a large offering like this goes through, it can stimulate investor interest in new issues. Every successive large offering then builds on the previous one.
And this is considered to be a particularly high-quality issue. The EIB is the financing arm of the European Union, and it is rated triple-A by Standard & Poor's, Moody's Investors Service, and Fitch Ratings.
Citigroup, JP Morgan, and Merrill Lynch are managing the sale.
By Stephen Taub.