Nykredit Realkredit in Eu500m euro senior unsecured FRN first

Sep 4th, 2014

Nykredit Realkredit launched an inaugural senior unsecured Eu500m five year floating rate note on Tuesday, the first time the Danish financial group has issued a euro senior unsecured instrument out of its mortgage credit institution rather than Nykredit Bank.

Nykredit imageLeads BNP Paribas and Nykredit Markets announced the transaction early on Tuesday morning, expecting little competing supply and with no data due, according to a banker at the leads.

“The constructive market tone presented an opportunity to take advantage of a very attractive funding cost despite the issuer not having budgeted or needing to issue so soon after summer,” he said.

Initial price thoughts of three month Euribor plus the high 50s were announced with intra-day execution targeted.

The book grew strongly during the first hour of bookbuilding, according to the lead banker, and reached more than Eu500m after an hour-and-a-half, with guidance revised to Euribor plus 55bp-57bp shortly thereafter. The books were closed around an hour later given that the deal was not going to be increased beyond Eu500m, even though this meant that one or two accounts could not get credit lines in place in time.

The re-offer was set at the tight end of guidance, 55bp over, with the final book at Eu700m and comprising over 60 accounts. Austria, Germany and Switzerland collectively took 36% of the issue, Nordics 27%, France 14%, the Benelux 11%, Iberia 9%, and the UK 3%. Asset managers were allocated 50%, banks 42%, corporates 5%, and insurance companies 3%.

“Nykredit Realkredit took advantage of market strength and a robust investor following to provide accounts with the product they wanted without unnecessary physical marketing work,” said the lead banker. “Outstanding euro senior unsecured instruments have been issued out of Nykredit Bank, and the view that senior unsecured from Nykredit Realkredit would be very well received was quickly proven.”

Meanwhile, Finnish insurance group Sampo Oyj is eyeing a senior euro issue, having mandated Citi, Deutsche and Nordea for a roadshow.

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