Council of Europe Development Bank (AAA/Aaa/AAA) (CEB) priced the first Kangaroo deal for a fortnight on July 3: a A$200 million (US$192.4 million) increase to its largest line, the 2012, adding to its outstanding ahead of a forthcoming maturity.

Lead managed by TD Securities (TD), the transaction priced at 90.25 basis points over the benchmark 5.75 per cent April 2012 Australian government bond, a significant tightening of the level of the last tap of the line, 116 basis points over government on March 11 but comparable with the February 15 mark of 95.5 basis points over. The total outstanding in the line is now A$900 million.

Peter Dalton, vice president and director at TD in Sydney, says it should not be taken as a negative sign that the bond was not tapped to the A$1 billion benchmark level. “That was absolutely not a function of demand but rather of the issuer being firm on the size it wanted,” he explains. “CEB’s priority was turning a specific size of deal round while the opportunity presented.”

Dalton says 75 per cent of the increase was placed with offshore investors, with the opportunity for the trade opened by CEB’s August Kangaroo maturity. “With a number of the highest rated SSAs, like CEB, well funded we expect there might be some cherry picking of levels and maturities in different markets over the next couple of months,” he comments.

CEB is not among the biggest volume Kangaroo borrowers with A$2 billion in total outstanding across its 2008, 2012 and 2015 lines. The A$500 million 2008 matures on August 15.

Issuer	Council of Europe Development Bank
Rating (S&P/Moody's/Fitch)	AAA/Aaa/AAA
Sector	Supranational
Country	Supranational
Market	Kangaroo
Pricing date	3 July 2008
Settlement date	23 July 2008
Maturity date	23 January 2012
Issue Amount	A$200 million
Total Outstanding	A$900 million
Format	Fixed rate medium term notes increase
Coupon	6.25 per cent
Yield	7.6175% semi annual
Spreads	90.25bp/15 April 12 ACGB
Issue price	95.867 (no accrued interest)
Joint Lead Managers	TD Securities
Other bonds outstanding	A$500 million due 15 Aug 08
	A$600 million due 14 Dec 15