Pohjola Bank debuts in Samurai with ¥30bn three tranche transaction

Jun 20th, 2013

Pohjola Bank priced its debut Samurai issue on Wednesday, a ¥30bn (Eu235m) three tranche deal, which the group’s head of funding said marked the beginning of a long term presence that made the work on setting up the programme worthwhile.

Lauri IloniemiLauri Iloniemi, head of group funding at OP-Pohjola, said that the issuer was pleased with the result.

“During the process the market was not at its best in many ways and there was quite a bit of volatility,” he told Nordic FIs & Covered. “But we got a ¥30bn deal done and a good number of orders.

“There was a lot of work involved, but it was worthwhile,” he added. “We have now done the inaugural deal and have opened a new funding source.”

According to Iloniemi there were 45 orders for the transaction.

“We have seen some of these names in our euro deals, but most of them are new investors to us,” he said. “Especially pleasing was that we got most of the guys that we saw during our roadshow in Tokyo.”

The deal was structured with five year fixed and floating rate tranches, and a three year fixed rate tranche. A possible three year floating rate tranche was dropped along the way, reflecting investors’ preferences. Daiwa, Nomura and SMBC Nikko were leads.

The largest tranche was a ¥21.1bn three year piece priced at 16bp over yen swaps. A ¥2bn five year FRN was priced at three month Yen Libor plus 27bp and a ¥6.9bn five year fixed rate tranche at 17bp over Yen swaps.

“In the five year fixed, it was somewhat above what we would have paid in euros,” said Iloniemi. “In three years fixed it was roughly the same level.

“It is a price for opening a new market and that’s a price worth paying,” he added. “And of course when you talk about Samurais it’s a function of many things, one of them of course being the basis swap.”

Iloniemi said that Pohjola plans to return to the Samurai market once a year.

“Because there is quite a bit of work involved in Samurais, it doesn’t make sense to issue just once and walk away,” he said. “The next issues will be easier to execute after we have done the first one.”

Svenska Handelsbanken opened books on a four tranche Samurai on Tuesday. Bank of America Merrill Lynch, Mitsubishi UFJ Morgan Stanley, Mizuho and Nomura are marketing three and five year fixed rate notes at 6bp-8bp over yen swaps, and 9bp-11bp over, respectively. Guidance on a three year FRN is 16bp-18bp over three month yen Libor, and 19bp-21bp over for a five year FRN. The deal is due to be priced next Thursday (27 June).


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