SpareBank 1 Boligkreditt sold a $1.25bn five year benchmark yesterday (Thursday), pricing flat to a UBS five year launched on Tuesday and potentially inside where a new euro benchmark for the Norwegian bank would come.

Barclays Capital, Credit Suisse, Deutsche Bank and HSBC priced the June 2017 issue at 105bp over mid-swaps, after having gone out with initial price guidance of 105bp-110bp over. A syndicate official at one of the leads said that the long five year maturity was chosen as the issuer already has a March 2017 maturity.

“The shadow bookbuilding on Wednesday evening saw strong momentum,” he said, “with reverse interest of $500m-$700m at an initial guidance price of mid-swaps plus 105bp-110bp area from a limited number of real money accounts prior to formal opening. The order book grew to $1bn within an hour of formal announcement at 8am New York time, which allowed a revised official price guidance of mid-swaps plus 105bp.

“The order book was closed within three and a half hours at just over $1.6bn with 33 accounts participating. The quality and size of the book enabled pricing at the official guidance of mid-swaps plus 105bp for a $1.25bn deal, fully meeting the issuer’s price and size objectives.”

He said the basis between dollars and euros was worth around 60bp and a banker at another of the leads said that the pricing was equivalent to the low to mid 40s in euros. He said that SpareBank 1’s old March 2017s in euros were at 49bp/40bp in the secondary market, meaning that the dollar pricing was flat to through where a new euro would come.

“It’s a great result,” he said.

UBS launched a $2bn straight five year on Tuesday that was also priced at 105bp over, following guidance of 105bp-110bp. The banker said that SpareBank 1’s ability to price flat to the Swiss bank was also impressive, given that UBS’s five year paper is quoted tighter, at 42bp/32bp, in euros.

The other syndicate official said that a 2.3% coupon attracted very good participation from fund managers. Some 90% of allocations were to real money accounts, he added, with fund managers taking 74%, central banks and agencies 10%, insurance companies and pension funds 5%, banks 10%, and others 1%.

Demand was primarily driven by US accounts, which were allocated 80%, he said, with Europe taking 16%, and others 4%.