Handelsbanken ¥50.5bn debut wraps up Nordic Samurai spree

Jun 27th, 2013

Svenska Handelsbanken rounded off a Samurai issuance spree from Nordic and other European banks today (Thursday), pricing a ¥50.5bn (Eu396m, Skr3.47bn) four tranche transaction inside Swedish peer Nordea.

SvenskaHandelsbanken300Handelsbanken’s debut deal took total Samurai issuance in the first quarter of the 2013-2014 Japanese fiscal year to ¥621bn, 12% more than ¥558.5bn that was launched in the same quarter a year earlier despite more difficult market conditions, according to a DCM banker at one of joint leads Bank of America Merrill Lynch, Mitsubishi UFJ Morgan Stanley, Mizuho and Nomura.

The Swedish bank’s deal was the third Samurai from a Nordic issuer in the busy quarter, with Nordea having priced a ¥91.2bn deal at the end of May and Finland’s Pohjola Bank having sold a ¥30bn deal last week.

Handelsbanken’s deal was split into fixed and floating three and five year tranches. A ¥14.1bn three year FRN was priced at three month Yen Libor plus 17bp and a ¥3.1bn five year FRN at plus 20bp, while a ¥17.5bn three year fixed rate tranche was issued at 7bp over Yen mid-swaps and a ¥15.8bn five year fixed rate at 10bp over.

According to the lead banker, this put Handelsbanken inside Nordea, which had itself put itself at the tight end of European FIG credits in the Samurai market with pricing tighter than Rabobank. Handelsbanken managed this in spite of volatile global market conditions in the week leading up to pricing.

“There was a jittery market and it is normal that investors sit on the sidelines to wait and see where rates are going to settle,” said the lead banker. “It was also an inaugural trade, which always means more work than repeat transactions.

“And, again, we were stretching the boundaries with the level that we were going for.”

The spread of 10bp over in Handelsbanken’s five year fixed rate tranche compared with 11bp achieved by Nordea in the same maturity and format. In the interim HSBC sold a five year fixed rate tranche of a ¥54.9bn deal at 6bp over, putting it at the tight end of the market.

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