DNB reopens Samurais for European banks, increases granularity

Jan 16th, 2014

DNB is closing the first Samurai issue for a European financial institution of 2014 tomorrow (Friday), a ¥81.6bn (Eu573m, Nkr4.78bn) dual tranche five year senior unsecured deal that achieved far broader distribution than the Norwegian bank’s last Samurai.

The issue has been split into a ¥78bn fixed rate tranche and a ¥3.6bn FRN, which leads Daiwa, Mizuho and Nomura are pricing at the equivalent of Yen swap offered plus 19bp.

A DCM official at one of the leads said that the level was attractive, putting the pricing 3bp-5bp tighter than DNB would likely achieve on a new five year fixed rate benchmark in euros. He said that 2020 paper in euros was trading at around 59bp mid and noted that Rabobank yesterday (Wednesday) priced a Eu1.5bn five year benchmark at 63bp over mid-swaps.

DNBThe division of the transaction into the much larger fixed rate and smaller floating tranches was as expected, he added, noting that DNB was also not interested in shorter maturities and that the economics of longer dated issuance did not make sense.

The deal is larger than DNB’s last Samurai, which was a ¥65bn five year issue launched in January 2012. The lead banker also highlighted that distribution was much more granular, with just two investors having taken some ¥55bn of the previous trade and the largest order on the new issue accounting for less than 30% of the total. He noted that execution of DNB’s last deal had been more complicated as it had come in the wake of a crisis at Norway’s Eksportfinans, which was not an issue this time around.

A total of 112 tickets were sold across the two tranches, with placement having increased in Tokyo, which took ¥50.9bn of the fixed rate tranche, as well as elsewhere in Japan, which took ¥27.1bn.

City banks were allocated ¥30bn, trust banks ¥0.6bn, specialised banks ¥2bn, life insurance ¥9.2bn, property insurance ¥2bn, asset managers ¥7.1bn, regional banks ¥7.9bn, Shinkins, etc ¥9.2bn, and others ¥10bn.

Thor Tellefsen, senior vice president and head of long term funding at DNB, told Nordic FIs & Covered that the transaction is part of the bank’s regular funding business, coming on top of its debut Samurai to ensure the issuer maintains access to its Japanese investor base.

The lead banker said that although a couple of other European names are looking at the Samurai market there is no concrete pipeline. He added that, with DNB’s peers going into blackout, the next trades are more likely to emerge in late February or March.


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