Aktia group launched its first covered bond under a new Aktia Bank programme today (Monday), a Eu500m no-grow five year that offered a pick-up over other Finnish paper, although a lead syndicate banker said the issuer should eventually price in line with its peers.

The Finnish group previously issued covered bonds via Aktia Real Estate Mortgage Bank (Aktia REMB), but moved away from this set-up due to ratings pressure and, after exploring other possibilities, opted to issue off Aktia Bank’s balance sheet instead. The issuer finished a roadshow on Thursday and went out with a Eu500m no-grow five year mortgage deal this morning, via Crédit Agricole, JP Morgan, Nordea and UniCredit.

The deal will be priced at 15bp over mid-swaps, the tight end of guidance of the 17bp over area plus/minus 2bp, which followed initial price thoughts of the high teens. Almost Eu1bn worth of orders were placed for the deal, according to a lead syndicate official.

“In my opinion it’s a very granular book, led by the Nordics and Germany but also other bits and pieces,” he said.

The transaction benefitted from carrying a triple-A rating (from Moody’s), he added, with investors who previously were interested in the Aktia name now being able to participate as a result of the higher rating. Aktia Real Estate Mortgage Bank covered bonds are rated Aa3 by Moody’s, having previously been rated Aa1.

The 15bp over level positions Aktia as the cheapest Finnish covered bond issuer, but this is in part due to the inaugural nature of the transaction and over time the differential will shrink, said the syndicate official.

“In future I expect it will trade in line with Pohjola and Sampo,” he said.

Syndicate bankers away from the leads said the deal offered a pick-up versus other Nordic names such as Nordea, but that this is appropriate.

“A Nordea five year would be in the high single-digits, so Aktia is providing 40%-50% more spread, which helps,” said one.

A lead syndicate official said that a new Nordea five year would come at between 10bp-12bp over.