Aktia mandates for roadshow, sets out long term needs

Aktia Bank announced on Tuesday that it has mandated banks to organise a series of investor meetings for its euro benchmark covered bond programme, with an official at the issuer noting that the roadshow would be used to gauge market conditions and investor appetite.

The roadshow is set to start on 25 March and end on 3 April, and will involve meetings with investors in several European capital cities. The mandated banks are Commerzbank, JP Morgan, LBBW and Nordea Markets.

Timo Ruotsalainen, head of treasury at Aktia Bank, said that the investor meetings are a marketing effort to assess market conditions.

“We will use it to decide if both the market and demand provide the opportunity for issuance,” he told Nordic FIs & Covered. “Our goal is to issue, but the timing is dependent on the market conditions and level of demand.”

Ruotsalainen said that the size of the prospective covered bond would be Eu500m. Any further issuance this year is yet to be determined.

“The reality, though, is that next spring we are going to have some Eu875m of redemptions and obviously there will be a need for new funding,” he added. “By the latest, we will need to return to the covered bond market at the beginning of next year.”

In 2012 Aktia decided to switch covered bond issuance from Aktia Real Estate Mortgage Bank to Aktia Bank. Any deal to emerge after the roadshow would be Aktia Bank’s second benchmark since the restructuring, after it sold a Eu500m five year in June 2013. The issue was priced at 15bp over mid-swaps on the back of Eu1bn of orders.

The most recent issue from a Finnish bank was a Eu1bn seven year for OP Mortgage Bank, which was priced at 14bp over on 10 March. Nordea Bank Finland priced a Eu1.5bn five year at 7bp over in early January.

“Both of these attracted plenty of demand with books closing around Eu2.3bn and are trading a couple of basis points tighter,” said Alex Sönnerberg, Nordic DCM at Crédit Agricole CIB. “In fact, all the Nordic deals have performed well in the secondary market and are trading 2bp-3bp tighter than re-offer.

“We’ve also seen better buying in five to 10 year Nordic covered bonds during the last couple of sessions as a result of the drop in Bunds.”