Finland’s Sampo Oyj sells Eu500m 7s

Sep 12th, 2014

Sampo Oyj, parent company of the Finnish financial conglomerate, sold a Eu500m seven year bond issue on Tuesday, its first euro benchmark since February 2012, and met with strong demand.

Sampo_headquarters_01According to Markku Pehkonen, group chief risk officer at Sampo, the new issue was launched to refinance a Eu300m transaction coming up for maturity on 3 October.

“We had a refinancing need and the market looked good, so we decided, why wait?” said Pehkonen.

The company held a four day roadshow from Tuesday to Friday of last week, taking in Helsinki, London, Paris, Amsterdam and Frankfurt.

Citi, Deutsche and Nordea then went out with the new issue on Tuesday, with initial price thoughts of the mid-swaps plus 90bp area. They revised guidance to 80bp-85bp and fixed the level at 80bp over after having built an order book of close to Eu3bn.

“We are happy with how it went,” said Pehkonen. “There was good interest.”

He said that the Eu500m size was decided upon at the start.

“We didn’t have in funding terms that need,” said Pehkonen, “but it was an easy choice for us to make because investors in the major European centres were anticipating a benchmark.”

He said that the pricing was in line with the secondary market level of Sampo’s last euro benchmark, the 2017 issue launched in 2012, which was said to be bid at around 50bp over mid-swaps.

The choice of a seven year maturity was a good compromise between the five to seven year funding the issuer was seeking and the five to 10 year maturities investors were looking for, according to Pehkonen.

The issuer’s last bond was a Skr4bn transaction in May 2013. Sampo’s debt is rated Baa2 by Moody’s.

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