Nykredit issued Skr10.5bn (Dkr8.52bn, Eu1.14bn) of one year ARMs bonds today (Friday) to refinance a capital centre that includes Swedish krona-denominated mortgages, and bettered its last syndicated krona sale despite having to entice investors amid low yields.

Nykredit Realkredit has become a regular issuer in Swedish kronor and its last syndicated sale was for Skr5.5bn in February. A level of 8bp over mid-swaps achieved on that issue was the tightest yet for any similar Nykredit issue, but today’s sale was priced tighter still, at 4bp over mid-swaps.

Leads Danske, Nordea and Nykredit went out with initial guidance of the mid to high single-digits over mid-swaps and revised this to 4bp-6bp over after about an hour and with books at Skr21bn, before settling on the ultimate 4bp over level.

A DCM official at one of the leads said that the provisional final order book size was Skr25bn, with more than 25 investors participating.

He said that while the level of 4bp over was tighter than in February, Nykredit had not come at such a close level relative to its Swedish peers – although he noted that the lack of comparable covered bond issuance in the one year part of the krona curve makes comparisons difficult. According to the DCM official, Nykredit had succeeded in reducing the premium it pays over Swedish issuers from some 20bp-25bp in the past to around 8bp-10bp over in February, but that it had paid up 12bp-13bp in today’s sale. He attributed this to the low yield environment and the need to entice Swedish accounts into participating.

“There is little else in that maturity and some investors still like it very much,” he said, “but they said, give us a bit of a pick-up as there is hardly any yield on it.”

An official at Nykredit Realkredit said that the spread was in line with recent tap sales.

The deal comes after Danske Bank on Wednesday of last week (20 August) sold its first Swedish krona covered bond in more than two years, a Skr5bn April 2018 FRN.