Danske on Thursday of last week (19 May) sold its first benchmark, syndicated Norwegian krone covered bond, a Nkr5bn five year FRN, as part of a plan to increase its presence in other Nordic markets with larger, LCR-eligible deals.

Danske in February announced a restructuring of its covered bond pools, which will see its I (international) cover pool in time become exclusively Norwegian, while the Danish bank will also establish a new Swedish issuer.

“Danske is recalibrating its covered bond funding and aims to be more active in the Swedish and Norwegian markets, and this was an important step in that plan,” said a syndicate official at one of the leads. “This is the strategy – to do big deals that are LCR-eligible in Norway, so the issuer has large syndicated deals that are open for taps.”

The Nkr5bn (Eu539m, Dkr4bn) five year FRN, which was issued out of Danske’s I cover pool, was priced by leads Danske, DNB and Nordea at three month Libor plus 60bp.

The lead syndicate official said the deal offered a “moderate” premium over domestic Norwegian issuers.

He added that the deal was fully covered, and attracted some international interest alongside the expected domestic accounts, which he attributed to the deal’s 1.6% first coupon.

“It’s not often you can get a coupon like that on five year European paper,” he said.

Danske on Wednesday formally applied to the Swedish FSA (Finansinspektionen) to set up the Swedish issuer, saying it expects completion next year.