Skandinaviska Enskilda Banken (SEB) sold an inaugural sterling covered bond yesterday (Thursday), a £250m (Eu353m, Skr3.29bn) three year FRN, and the issuer’s head of treasury management said it would now look to return to the UK market each year.

SEB last tapped the sterling bond market in September 2013, when it sold a £300m seven year senior unsecured deal, having instead focused on the Swedish krona, euro and dollar markets for wholesale funding.

John Arne Wang, head of treasury management at SEB, said the new issue was an opportunistic one, but added that SEB had for a while been considering the sterling market as an add-on to the domestic and euro markets.

“Yesterday’s three year transaction served as an entry point,” said Wang. “Going forward, the sterling covered is a market we would like to be involved in when there is investor demand and spread levels working out in relative terms to the domestic market.

“And, at the moment, the levels are interesting, especially in the three year part of the curve.”

Leads Barclays and Deutsche priced the £250m (Eu353m, Skr3.29bn) three year FRN at 40bp over three month Libor, after announcing the deal with guidance of the 40bp area.

Wang said the new issue came flat to where the most recent Swedish covered bond was trading on the bid. He added that the deal had attracted strong follow-on demand after pricing and that the bond was trading at around the re-offer yesterday afternoon.

More than 20 accounts were in the final order book, and Wang said the deal attracted good participation from bank treasuries and real money accounts, as well as some investors that SEB would not normally reach in other markets. He also said SEB found good international demand, with 30% going to accounts outside the UK and Ireland.

Wang said that SEB had expected to print a deal of around £250m, as currently only smaller volumes are available in the sterling market. Swedbank Hypotek sold the last sterling benchmark, on 21 October, pricing a £350m three year FRN at 38bp over three month Libor, and syndicate officials said that available volumes in the sterling market would likely decrease with some accounts now done for year.

Wang noted that SEB had been absent from the sterling market for some time, but said he expects SEB to launch a deal in the sterling market each year going forward, as long as levels are competitive.