Svenska Handelsbanken matches UK growth with £300m curve extension

Nov 29th, 2012

Svenska Handelsbanken launched a £300m (Eu371m/Skr3.21bn) 10 year senior unsecured issue on Monday, the Swedish bank’s longest dated deal in the UK currency.

HandelsbankenThe deal is Handelsbanken’s second in the sterling market this year, after it sold £400m of seven year fixed and two year floating rate paper in a dual tranche issue in January.

Thomas Åhman, deputy head of treasury at Handelsbanken, told Nordic FIs & Covered that the issuer launched the deal after seeing the chance to extend its curve in the sterling market.

“We felt that there hadn’t been that much supply in the UK market when it comes to senior issuance – although there were some other deals in the market on the day we came,” he said. “And for us, we thought it was a good opportunity to keep on building up our curve in the UK.

“As we have said, the sterling market is strategically important for us now and it will be going forward because our UK business is growing day by day as well, so for us it is natural to build up a curve in the sterling market to support the business that we do there.”

The bank now has around 135 branches in the UK, where it has been active since 1982.

The deal was priced by leads HSBC and RBS at 118bp over Gilts, following guidance of the 120bp area. Åhman said that this compared well relative to other senior unsecured funding options.

“When it comes to senior unsecured, it is of course important that the pricing is in line with other markets if you compare them on an all-in basis with euros or dollars, for example,” he said. “In this case it was clear that the sterling market was on a par with or even a few basis points inside where we could have done a euro deal.

“It was therefore very natural for us to tap the sterling market.”

The proceeds will be kept in sterling, given Handelsbanken’s UK needs, said Åhman.

He said that no deal-related roadshow had been held ahead of the UK deal, but that the issuer conducts ongoing investor meetings and in this regard held some meetings in the UK recently. The deal was predominantly distributed to UK accounts, he added.

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