Nordea Bank Finland took advantage of an improved tone today (Wednesday) to launch its second euro benchmark this year, with Eu3bn of demand for the rare and high quality supply allowing pricing of a Eu1.5bn seven year with no new issue concession.

The issuer is said to have been monitoring the market for a few days before launching a deal this morning, with leads BNP Paribas, Deutsche Bank, Nordea Markets and UBS opening order books after gathering more than Eu1.5bn of orders based on initial price thoughts of the 45bp over mid-swaps area.

Official guidance was set at the 42bp over area, with the spread fixed at 40bp over and the size at Eu1.5bn on the back of more than Eu3bn of demand.

A syndicate official at one of the leads said that the deal was very strong, in particular given that no new issue concession was paid, an assessment shared by syndicate bankers away from the deal.

The lead syndicate official said that it was positive to see central banks and bank treasuries moving out to seven years, with insurance companies less involved in the maturity given low yields.

Syndicate bankers away from the leads said that the issuer took advantage of improved market conditions in what is a window-driven primary market, with one referring to today’s issuance opportunity as a “sweet spot”.

The lead syndicate official said that Nordea made a smart move in tapping the market today.

“They got in on a strong day,” he said.

The deal is Nordea Bank Finland’s second, coming after a Eu2.25bn five year in January that was priced at 65bp over, 25bp wider than today’s seven year. Nordea has been the sole source of Finnish benchmark paper this year.

Syndicate officials away from the deal said that at 40bp over, it will be priced without a new issue premium, despite starting with a more generous level at the indications of interest stage, and that this is justified given the high quality of the issuer and the jurisdiction.

“It’s a good deal,” said one.

Another syndicate official said that he would put a new seven year for Nordea Bank Finland at 43bp/36bp, which would mean that the issuer is not paying any new issue premium.

He said that this is fair given the “rock-solid” nature of the offering, backed by a high quality bank and sovereign, one of few to be rated triple-A.

“It’s a good message,” he said.

He also compared the pricing on Nordea’s deal with that on a Eu1.5bn five year issue for Sweden’s Stadshypotek, which came at 30bp over on 14 March, putting the curve between five and seven years for prime Nordic issuers at 9bp-11bp, with the latter taking a new seven year to 41bp over.

“Nordea is printing very close to where Stadshypotek printed a five year in a very green market,” he said. “It’s extremely tight and good.”

Stadshypotek’s was the last Nordic deal to have been priced before today’s transaction.

Pricing of Nordea’s issue was not affected by the deal being launched into a short issuance window flanked by volatility, suggested the syndicate banker, with Nordic levels already very tight.

“You’re not losing much by being in a market that is only 24hrs,” he said, adding that Nordic covered bonds will not be the ones to perform if market stability returns as other jurisdictions will be in focus then.