Credit Suisse is in the dollar market today (Tuesday) with a $1bn five year transaction after Norway’s SpareBank 1 Boligkreditt yesterday raised $1.25bn through a five year US targeted benchmark, with the dollar market providing welcome relief from tough conditions in euros.

BNP Paribas, Credit Suisse, Deutsche Bank, HSBC and Royal Bank of Scotland are understood to have taken orders from some 50 accounts this morning for Credit Suisse’s inaugural benchmark dollar covered bond.

“The deal is going very well,” said a banker close to the deal.

He said that, unlike many dollar transactions, the issuer had been keen to get in Asian and European demand early and then go into the US open with a more substantial order book.

SpareBank 1 Boligkreditt is understood to have sold 78% of its $1.25bn five year benchmark into the US yesterday (Monday), after roadshowing there in March and having issued its debut 144A deal in October, a $1.5bn three year. The new issue was priced at 62bp over mid-swaps, equivalent to 85.75bp over Treasuries.

“We had been looking at the US market for some time, but we felt that the differential to Europe was too large,” Arve Austestad, chief executive officer of SpareBank 1 Boligkreditt, told The Covered Bond Report.

He said that in the run-up to Easter covered bond spreads in the dollar market had been under pressure, but in the past three to four weeks had been improving. At the end of last week, for example, a DnB Nor Boligkreditt five year deal launched at the end of March at 66bp over mid-swaps was quoted in the high 50s.

Austestad said that the issuer also had to update its documentation and this was completed by yesterday. The Norwegian issuer was therefore ready to proceed this week, but accelerated its plans slightly in light of Credit Suisse’s intentions to come this week, too.

“We had always planned to be ready on Monday,” he said. “Because we had come to the market before, we could come quickly without having to do much pre-sounding.”

Some European issuers have split their dollar benchmarks into fixed and floating tranches, or issued solely in floating rate format, but Austestad said that this was not appropriate in the five year maturity, where there are fewer natural takers of FRNs than in three years.

He said that the cost of the transaction was more or less equivalent to where funding might be raised in euros.

“For us it’s more important to have the diversification away from euros,” he added.

Austestad said that the difficult conditions in the euro market vindicated the issuer’s strategy.

“When the euro market is a bit more fragile, our ability to issue in the US is a benefit,” he said.