Swedbank Hypotek reopened the sterling market today (Wednesday) with its second covered bond of the year in the UK market, a three year floating rate note, which syndicate officials noted came with pricing reflective of the widening in spreads since the last bout of supply.

The Swedish issuer’s deal came after it announced its latest results yesterday (Tuesday), being one of the first banks to emerge from black-out periods to open the latest European reporting season.

Leads Barclays and RBS announced IPTs of the 38bp-40bp over three month Libor area for the three year sterling-denominated floating rate note, before fixing guidance at 38bp over and maintaining that level for the re-offer with books over £350m (Eu477m, Skr4.493bn). The size of the deal was not set when The CBR went to press.

“It’s had a decent reception,” said a syndicate official at one of the leads.

The last wave of sterling benchmark issuance came between mid-July and August, with three year FRNs from Royal Bank of Canada, Bank of Nova Scotia and Stadshypotek, and syndicate officials noted that these were priced at 28bp over three month Libor.

“This does represent something of a repricing of the market,” said a syndicate official away from the leads, “but with current basis swap levels this spread does still look attractive for Swedbank versus what they could’ve done in euros or the domestic market.”

The syndicate official said that the sterling market for non-UK covered bonds has not felt in good shape, with demand apparently limited after senior unsecured sterling issues from CBA and RBC and a Lloyds RMBS transaction in recent weeks.

“There’s been quite a few trades with this sort of tenor that will have taken out a chunk of capacity, so if Swedbank does manage to print a £250m-£300m deal that would represent a good result,” he said.

Swedbank’s last sterling benchmark covered bond was a £500m three year FRN in March.