Danske in Sfr150m Tier 2 ‘Trekroner’ follow-up

Dec 5th, 2013

Danske Bank priced a Sfr150m 12 year non-call seven Tier 2 issue on Monday in a follow-up to a Nordic-targeted “Trekroner” subordinated debt sale last week, and in line with stated plans to explore Tier 2 issuance in European currencies.

The transaction is Danske’s third Tier 2 issue since the end of September, when it sold a Eu1bn 3.875% 10 non-call five bond. Last week the bank tapped the Nordic markets with a US$1bn-equivalent five tranche issue in all three Nordic currencies, hence the “Trekroner”, or “three crowns” name.

DanskePeter Holm, senior vice president, group treasury, Danske Bank, said that the Swiss franc transaction is consistent with the bank’s plans, announced in the middle of November, that it would initiate discussions with investors about issuing additional Tier 2 capital in European currencies.

“We did that with the Trekroner and also had reverse enquiry from Swiss investors in mind that we might avail ourselves of,” he told Nordic FIs & Covered. “When we finalised the Trekroner we turned to that and got a small, very nice deal.”

Leads Credit Suisse and UBS priced the Sfr150m 3.125% deal at 215bp over mid-swaps, in line with guidance of the 215bp over area. Demand was skewed toward institutional investors given that many private and retail accounts had already closed their books for the year, said a syndicate banker at one of the leads.

“The timing clearly impacted the retail bid, but we had reverse enquiries, which is why we chose to go ahead at this time of the year,” he said. “The rest of the order book was very strong.”

The bonds have performed by a couple of basis points, he added.

The 215bp over re-offer spread equates to a euro mid-swap level of 246bp, according to the syndicate banker, which compares with a new issue spread of some 255bp over that would be needed for a theoretical new euro 12 non-call seven.

Holm said that in Danske’s view the Swiss franc transaction provided comparable to slightly cheaper debt capital than what it would have paid in euros. The Swiss franc deal also contributed toward the issuer’s goal of extending the maturity of its Tier 2 capital beyond a 10 non-call five structure, he added, which Danske had also been able to do with some of the Trekroner tranches.

Email this to someoneShare on LinkedInTweet about this on TwitterShare on Google+Share on FacebookShare on RedditDigg thisPin on PinterestShare on Tumblr
Tags: , , , ,