Swedbank places rare £250m floating rate note in opportunistic move

Nov 1st, 2012

Swedbank priced a £250m (Skr2.67bn/Eu310m) three year floating rate senior unsecured transaction on Tuesday, an opportunistic foray in the currency that was built around a private placement idea, according to a treasury official at the issuer.

The deal was priced at 65bp over three month Libor via leads Nomura and Royal Bank of Scotland, with around £270m of orders placed.

The order book is understood to have included around 30 orders from high quality buy-and-hold investors.

Kimmy Samuelsson, head of long term funding at Swedbank, said that the re-offer spread is in line with the issuer’s private placement targets, and that the transaction was opportunistic, with Swedbank already having completed its funding plan for 2012.

“We wanted to provide something to investors, and saw an opportunity to do a smaller deal at an attractive level for us and investors,” he said.

The deal grew out of a sterling private placement idea, he added, with the issuer aware that it would need to offer at a deal size of at least £200m and the range set at a maximum of £50m.

The transaction is the first time in a while that Swedbank has tapped the sterling market, according to Samuelsson.

“We take the sterling market into consideration, but it is not one where we have an established curve,” he said. “Many of the investors in the book are ones that we speak to regularly, but who we usually see in euro and dollar transactions.”

Whether or not the proceeds from the deal will be swapped to Swedish kronor will be decided separately, he added.

The last Swedish bank to issue in the sterling market was Svenska Handelsbanken, which sold a £400m seven year fixed rate deal and a £400m two year floating rate note in January.

Swedbank’s sterling deal comes after it in late September launched its first senior unsecured benchmark in US dollars, a $1bn five year issue that was priced at 150bp over Treasuries after the leads built an order book of $2.6bn.

The bank last week announced better than expected third quarter results.

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