BIL and LuxCSD cooperate in the launch of the first domestically-issued Luxembourg government bond
Banque Internationale à Luxembourg (BIL) has played a key role in the launch of the first Luxembourg government bond issued through LuxCSD, a domestic central securities depository (CSD). This bond, the issuer’s longest dated so far with a 15 year tenor, launched into the primary markets on March 19, 2013 and has raised 750 million euros.
The bond was issued through LuxCSD, the national provider for issuance and primary distribution and a supplier of Euro central bank money settlement and custody services founded in 2010. BIL was appointed as Principal Paying Agent in its collaboration with the CSD. BIL’s role was to oversee efficient communications between the issuer and the joint-lead managers/investors and to handle the delivery against payment transaction in the financial systems. The BIL essentially oversaw the flow of securities towards joint lead managers/investors and the return flow of investment capital to the government.
BIL used an integrated management tool that enabled the launch of the bond issue and the tracking of the incoming investment funds.
The launch coincides with the 50th anniversary of the Bank’s role in launching the first Eurobond. Back in 1963, BIL served as the listing agent in that bond, issued by the Italian highway construction company Autostrade, which was listed on the Luxembourg Stock Exchange. This accomplishment was one of the key factors behind the success of the Luxembourg financial centre. Now, after half a century of experience with bond products, BIL is able to supply the necessary support through its flexibility and responsiveness in the management process with the Luxembourg Central Bank.
The bond issue benefits from Luxembourg’s regulatory environment known as being one of the world’s safest for the management and custody of collateral.
Through its partners and access to international financial market infrastructure, LuxCSD offers a range of issuance, settlement and asset servicing services at the same level as other international central securities depositories. Settlement is offered using low risk Euro central bank money. This also allows international customers to use LuxCSD’s services without any additional cost.
These services are available to banks, custodians and distributors across the globe. LuxCSD offers access to counterparts worldwide through its highly efficient settlement process. International investors had full access to the recently launched Luxembourg government bond and were able to benefit from the high quality bond issuance services offered by LuxCSD and BIL.
“BIL is proud to have played a role in the Luxembourg government’s first domestically-launched bond issue in collaboration with LuxCSD,” declared BIL CEO François Pauly. “This bond issue recalls the Bank’s involvement in the first Eurobond in 1963, giving it 50 years of experience with international bond issuances. The Bank’s responsiveness and flexibility ensured that all parties were able to enjoy the international quality of service in Luxembourg.”
“Through LuxCSD’s international-grade issuance, Euro central bank money settlement, and asset servicing abilities, along with BIL’s substantial bond experience, we were able to provide domestic and international investors with a flawless bond investment service and the Luxembourg government with fast access to the capital it sought to raise,” said Patrick Georg, LuxCSD’s General Manager. “LuxCSD has again proved that it offers world-class service within Luxembourg’s stable, well-regulated environment. Supporting this issuance is a key milestone for LuxCSD in fulfilling its mandate to strengthen the Luxembourg financial place as efficient issuance and distribution hub in Euro central bank money“
About LuxCSD
LuxCSD provides the Luxembourg financial community with central bank money settlement services in euros as well as issuance and custody services for a wide range of domestic and international securities, including investment funds. LuxCSD offers custodians and distributors across Europe excellent custody and added-value services built on a highly efficient settlement process, with access to many counterparties. Settlement of securities transactions in central bank money reduces risk for financial market participants. LuxCSD is jointly owned by the Luxembourg Central Bank (BCL) and Clearstream International S.A. (50:50). It was founded in 2010 and went live in 2011, shortly after it was designated a Securities Settlement System by the BCL. The company’s commitment in May 2012 to join TARGET2-Securities marks another milestone in the young life of the Luxembourg CSD.
Further information: www.luxcsd.com
About Banque Internationale à Luxembourg
Founded in 1856, Banque Internationale à Luxembourg (BIL) is the oldest private bank in the Grand Duchy. Since its creation, it has played an active role in the development of the principal phases of the Luxembourg economy and currently operates retail banking, private banking, corporate banking and financial markets businesses. With over 2,100 employees, the bank is present in the financial centres of Luxembourg, Denmark, Singapore, Switzerland and the Middle East. More at www.bil.com
Press contacts
BIL
Tom ANEN
+352 4590 3879
tom.anen@bil.com