KLP Boligkreditt issued its first covered bond on 5 September, a Nkr500m (Eu60m) five year floating rate note, and an official at KLP Banken said that a next covered bond issue is already being worked on, with Nkr5bn expected by the end of 2015.

KLP received regulatory approval for the Boligkreditt in March and has been preparing the first issue for some time. Kristian Lie-Pedersen, analyst at KLP Banken, said that the debut issue came after all the necessary work had been completed. Moody’s rated the issuer’s programme Aaa the day before the first deal was launched.

“We are very excited to have the new company up and running,” said Lie-Pedersen.

The inaugural, Nkr500m September 2019 mortgage-backed covered bond issue was priced at three month Nibor plus 25bp. It was led by DNB Markets and according to a syndicate official at the bank the pricing put it around 5bp over the DNB/Nordea benchmark covered bond curve.

He said that the transaction was well oversubscribed, with most of it sold to life insurance companies and fund managers.

Lie-Pedersen said that work is underway on a follow-up issue. The issuer plans to sell some Nkr5bn of covered bonds by the end of next year, he added.

KLP Banken is part of the KLP group, with Kommunal Landspensjonskasse the parent company, and KLP being Norway’s largest life insurance company. The KLP group already had a public sector covered bond issuer, KLP Kommunekredit.