SpareBank 1 Boligkreditt this (Tuesday) morning launched the fourth Nordic covered bond of the year, a Eu1.25bn seven year benchmark that syndicate officials said benefited from strong demand for quality paper, allowing the Norwegian issuer to succeed in the maturity.

SpareBank 1 is pricing the deal at 77bp over mid-swaps after leads Barclays Capital, Deutsche Bank, Société Générale and UniCredit tightened the spread from initial guidance of the 77bp-79bp over area. Indications of interest were taken yesterday (Monday) afternoon with initial price thoughts of the mid-swaps plus 80bp area.

A syndicate official away from the leads noted there had not been much supply from the Nordic region this year.

“Other Nordic deals have gone very well, so it’s not surprising this deal is in good shape,” he said.

The trade follows three other transactions from the Nordic region, comprising a Eu500m five year issue from Terra BoligKreditt at 73bp over, a Eu2.25bn long five year issued by Nordea Bank Finland priced at 65bp over, and a DNB Boligkreditt Eu2bn 5.25 year at 68bp over.

A syndicate official away from the leads said that he understood the leads to have collected indications of interest of Eu1.5bn. Orders were above Eu1.7bn by the time the books were closed at 1130 CET.

“It looks like, game, set, and match for SpareBank 1,” said a syndicate official away from the leads. “We saw strong and continuing demand on the trade, allowing for a tightening of the spread.

“With a seven year, my initial reaction was that it would be more difficult,” he added, “but it’s a rare name, so I think investors bought it even if they weren’t sure about the tenor.”

Another syndicate official away from the leads said the seven year maturity was one that he expected to work.

“I think it hits the sweet spot for fund managers,” he said. “It’s such high quality that investors are not worried about going longer.”