Eika Boligkreditt waited for a window amid heavy supply to sell its first euro benchmark of the year yesterday (Wednesday), while Swedbank launched an opportunistic £350m FRN, with officials at each Nordic issuer satisfied with their results.

Eika’s Eu500m no-grow six year issue is its only euro benchmark of the year, and its first since a Eu500m March 2021 issue in March 2014. The deal had been expected since Eika completed a European roadshow on Tuesday of last week (13 October).

Anders Mathisen, senior vice president, funding at Eika Boligkreditt, said the issuer had wanted to get the deal away before an ECB meeting today (Thursday) – which contributed to the euro market being empty today – and to avoid competing supply.

“To be able to launch a successful deal in the current market it is important to find the right window for launching a transaction,” he added. “We monitored the market for some days after the roadshow, and the right window to launch the deal without too much competing supply came this Wednesday.”

Leads Deutsche, Natixis, Nordea and UniCredit priced the new issue at 22bp over mid-swaps, with books closing over Eu500m. The leads had announced initial price thoughts of the low 20s area, before moving to guidance of the 22bp area.

Mathisen said Eika was satisfied to have been able to print a successful benchmark transaction, after a period of heavy competing supply, without the support of the ECB’s covered bond purchase programme.

“With 48 orders from high quality investors, no inflated orders and a granular order book, we are happy with the outcome,” he said. “The outcome of a spread of 22bp was in line with our expectations and the announcement of IPTs of low 20s.”

Banks bought 68% of the deal, asset managers 24%, central banks and official institutions 7% and insurance companies and pension funds 1%. Accounts from Germany and Austria took 58%, the Nordics 25%, Asia 4%, the UK and Ireland 4%, the Benelux 3%, France 2%, Switzerland 1%, and others 3%.

Some syndicate officials away from the leads said that Eika’s deal offered a smaller new issue premium versus secondaries than other recent Norwegian deals, which were seen as paying around 10bp.

“Our main goal when launching a new transaction is to find the pricing that is clearing the market at that specific day,” said Mathisen. “Based on the interest we had that day, we ended up with a 7bp new issue premium and that was in line with our expectations as a core country issuer.”

Mathisen added that Eika chose to tap the euro market mainly for strategic reasons.

“We issue on a regular basis both in euros and Norwegian kroner,” he said. “The mixture between NOK and EUR funding is partly strategic driven and partly driven by the relative cost level in the different markets.

“In this specific transaction the strategic elements weighed the most in the sense that we have already built up a new benchmark in the domestic market and now wanted to launch a euro benchmark.”

Swedbank reopened the sterling covered bond market after two months without benchmark supply yesterday (Wednesday), and although its £350m three year FRN was priced 10bp wider than preceding deals an official at the issuer said the sterling market still offered attractive funding.

“This was an opportunistic transaction,” said Ulf Jakobsson, head of funding at Swedbank. “We have of course seen spread widening in covereds recently and this deal reflects that.

“But in comparison to our domestic market it was attractive for us to issue in sterling, with this deal being between 10bp-15bp cheaper than we would have achieved in the Swedish market.”

A banker at RBS said the new issue was priced around 8bp inside an equivalent euro transaction.

The new issue is the first benchmark in sterling since a wave of supply between mid-July and August, when three year FRNs from Royal Bank of Canada, Bank of Nova Scotia and Stadshypotek were priced at 28bp over three month Libor.

Leads Barclays and RBS priced the new £350m (Eu477m, Skr4.493bn) three year floating rate note at 38bp over three month Libor. It was launched with IPTs of the three month Libor plus 38bp-40bp area, before the leads fixed guidance at 38bp over.

“The transaction went according to plan, and matched our expectations for the demand and the pricing,” added Jakobsson.

The RBS banker said that the deal offered a new issue premium of 2bp.

Some 99.8% of the deal was allocated to accounts in the UK, with accounts in Switzerland taking 0.2%. Banks and private banks bought 62%, fund managers 24%, insurers 8% and others 7%.

The deal is Swedbank’s second benchmark covered bond in the sterling market this year, following a three year trade in April, while the issuer also sold a sterling senior unsecured transaction in May.

“We have been quite active in 2015,” added Jakobsson, “and I would say we are probably done for the year.”