Danske explores Nordic currency Tier 2 issuance

Nov 21st, 2013

Danske Bank is exploring investor interest in Tier 2 debt in the three Nordic currencies and depending on feedback could launch a deal, which would be its second Tier 2 issuance this year, after a September deal in euros.

The bank has initiated discussions with investors with a view to issuing new Tier 2 capital in the Danish, Norwegian and Swedish currencies, with meetings taking place from Wednesday to Friday.

Danske“We are trying to cover interest in these three currencies, and depending on feedback and market conditions, a deal may follow,” said Bent Callisen, first vice president, group treasury, at Danske Bank, told Nordic FIs & Covered.

“It’s been a while since we have done this type of transaction in the Scandinavian currencies, but we believe there is good interest.”

Danske Bank Markets is leading the transactions in all currencies. In addition, Nykredit Bank has been mandated for Danish kroner, Svenska Handelsbanken and Swedbank for Swedish kronor, and DNB Markets and Swedbank for Norwegian kroner, according to Callisen.

Danske Bank is working towards a Common Equity Tier 1 target of 13%, and a total capital target of 17%.

It has already raised Tier 2 debt in euros this year, pricing a Eu1bn 10 year non-call five issue on 24 September at 262.5bp over mid-swaps.

This contributed to replacing a $1bn Tier 2 issue that lost favourable equity treatment from Standard & Poor’s, leading Danske to tender for the securities.

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