Swedbank sets unsecured tight

Mar 13th, 2014

Swedbank on Monday priced a Eu750m (Skr6.64bn) five year senior unsecured transaction in its third visit to the benchmark debt capital markets this year, and, at 52bp over, the deal was the tightest five year senior unsecured euro benchmark to date in 2014.

SwedbankThe transaction comes after Swedbank sold a Eu750m 10 year non-call five Tier 2 issue on 17 February and three days later a U$1bn (Skr6.38bn) five year senior unsecured deal.

Taken together, these transactions mean Swedbank has been an active issuer in the benchmark markets so far this year, said Ulf Jakobsson, head of funding at Swedbank, and it is therefore likely to hold off on other funding that is on the agenda for 2014, namely a euro benchmark covered bond.

“We will probably wait until the second half of the year before looking at a euro covered, as we are quite far ahead in our funding plan after recent transactions,” he told Nordic FIs & Covered.

For the senior unsecured transaction, leads BNP Paribas, Deutsche Bank, HSBC, Nomura and Swedbank set guidance at 55bp over mid-swaps, plus or minus 3bp, and built an order book in excess of Eu2.1bn.

The transaction was first marketed with initial price thoughts of the mid to high 50s over, representing a new issue premium of around 7bp, according to one of the leads.

The deal was eventually priced at 52bp over, with the new issue concession down to 2bp at that level, and tightened some 2bp post-pricing, added the lead.

The issuer had been targeting a Eu750m deal from the outset.

At 52bp over, the deal is the tightest five year euro senior unsecured transaction to date this year, coming just 1bp tighter than a Eu750m five year for Berlin Hyp in late January.

Jakobsson said that the transaction went more or less as expected.

“We were quite convinced that it would generate good interest,” he said.

The deal is a transaction that the issuer had in its funding plan for 2013 but did not need at the time so postponed until this year, according to Jakobsson.

“The longest dated outstanding euro senior we had before this deal has less than three years to maturity, so we thought it would be good to have another point on the curve,” he added.

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