Swedbank debuts in Australia with A$390m senior unsecured deal

Swedbank priced an inaugural Australian dollar bond on Wednesday, a A$390m (Eu252m, Skr2.36bn) issue split into a A$325m three year FRN and a A$65m 10 year fixed rate tranche, which an official at the issuer said offered diversification and attractive funding.

Outside its domestic Swedish krona market, Swedbank has previously been a regular issuer in euros, US dollars and sterling across covered bonds, senior unsecured and capital trades.

Swedbank established a A$10bn programme in August and Ulf Jakobsson, head of funding at Swedbank, said that the issuer visited Australia a month ago ahead of the inaugural trade.

“It was our inaugural transaction and it went according to plan,” he said. “To us it offers diversification to the other more core markets.”

Leads HSBC, NAB, UBS and Westpac launched the deal on Tuesday, going out with the three year floating rate note, and when the issue was priced on Wednesday added the 10 year fixed rate tranche.

“That was based on a reverse enquiry that popped up during the process,” said Jakobsson.

A banker at one of the leads said that the deal was oversubscribed with very good support from Asian and Australian accounts.

The 10 year tranche was priced at 145bp over mid-swaps and the three year FRN at three month BBSW plus 115bp.

“We are quite happy with the price and the volume,” said Jakobsson. “Compared to the euro market, it was in fact quite attractive, coming inside where we would price an equivalent euro deal in the same tenor.”

Swedbank’s Australian dollar programme also allows for covered bond issuance. Jakobsson said that although this is an option the issuer has no such plans for the time being.