Nordea beats household name Rabobank with ¥100bn Samurai

Nordea priced a ¥100bn (Eu720m, Skr6.47bn) three tranche Samurai today (Thursday), with a lead banker noting that the deal beat a Rabobank Samurai from last week on pricing and size.Nordea’s transaction was split into five year fixed and floating rate tranches, and a three year fixed rate tranche, the largest, at ¥66bn, being the five year fixed. The three year tranche was for ¥22bn and the five year FRN for ¥12bn.

The three year fixed rate tranche was priced at 2bp over yen swap offer, the five year fixed at 5bp over and the five year FRN at 13bp over three month yen Libor.

More than ¥100bn of demand was registered for the deal, which Nordea capped at ¥100bn given limited funding needs, according to a banker at one of the leads — Bank of America Merrill Lynch, Daiwa, Mizuho Securities and Nomura.

He noted that Nordea achieved tighter pricing and drew more demand than a ¥100.3bn four tranche Samurai for Dutch issuer Rabobank last Thursday (15 May), which he said is still seen as the household European issuer of the Samurai market.

The three tranches of Nordea’s deal were priced 1bp tighter and were larger than the corresponding ones in Rabobank’s issue. The Dutch issuer sold ¥14.1bn in three year fixed rate format, ¥60.1bn in five year fixed and ¥18.3bn in a five year FRN. A ¥7.8bn 10 year made up the rest of the transaction.

The lead banker said that while Nordea capped its transaction, Rabobank printed full demand, as is standard practice in the Samurai market.

Demand was stronger than anticipated for the Swedish issuer’s deal, he said, and was driven by regional and corporate accounts whose participation the leads did not have much visibility about given their lack of involvement in recent Samurai transactions.

“The investor distribution expansion is clearing working for Nordea when it comes to second and third tier accounts in Japan,” he added.

Some 140 accounts were in the order book in total, according to the banker.

He also highlighted the pricing versus Australian issuers in the Samurai market as an achievement.

“Nordea is slowly but surely edging toward the Australian names,” he said. “They are the next target Nordea should have in mind.”

Commonwealth Bank of Australia recently priced a ¥75bn five year issue at 3bp over yen swaps offer.

Nordea’s deal hit a traditional window for Samurai issuance, which coincides with the early stages of the new financial year in Japan and European issuers’ emergence from blackouts following announcement of their quarterly results.

Commonwealth Bank of Australia’s issue was the first Samurai to hit the market in the new financial year in Japan, followed by Rabobank and then Nordea today.

“The pipeline has built up quite nicely, and there are a range of European issuers, including Nordics, that from a reputation and shelf perspective, could tap the market,” said the banker on Nordea’s deal.