SEB issues $1.5bn senior, real money interest strong

SEB priced a $1.5bn (Eu1.09, Skr9.63bn) five year senior unsecured issue on Tuesday, with an official at the issuer noting a very strong response in terms of the volume and quality of demand.

The deal is SEB’s second benchmark senior unsecured transaction this year, after a Eu1bn seven year on 12 February.

As SEB’s third senior unsecured benchmark in this format since March 2013, the deal represented the next step in the issuer’s strategy of establishing a dollar credit curve, according to John Arne Wang, head of treasury management at SEB.

The timing was opportune as the issuer had to update its 144A documentation to reflect its fourth quarter results, he added, and at the same time the US market offered very competitive levels.

It provided the issuer with funding slightly cheaper to that for a public euro deal of comparable size, said Wang.

Leads BAML, Barclays, Citi, Goldman Sachs and SEB built a book of around $2.8bn for the new issue and priced it at 85bp over US Treasuries, the tight end of guidance of the 87.5bp over area. This followed initial price thoughts of 90bp-95bp.

“We are very satisfied with the outcome,” said Wang. “It was one of the strongest senior order books we have seen recently, both in volume terms and quality of the book, which was exceptionally strong.”

He highlighted strong participation from real money accounts, and said that it was “evident that SEB’s footprint in the US market has advanced further”.

Asset managers were allocated 32%, SSAs 22%, pension funds and insurance companies 21%, banks 14%, corporates 10%, and others 1%. North American investors took 54%, Asia 21%, Nordics 14%, other Europe 10%, and others 1%.

Some 130 accounts participated.

The deal was launched just as concerns over the Crimea situation waned and the positive tone of recent weeks returned to the market, noted Wang, but a degree of residual uncertainty meant that some price sensitivity remained among investors.