SNS Bank will become a more regular issuer in the covered bond market after rebranding as de Volksbank, the Dutch bank’s head of funding told The CBR after its first benchmark in over four years yesterday (Monday), a Eu500m 15 year that represented “a very good deal” for the issuer.

The new deal is SNS’s first benchmark covered bond since August 2012, with the issuer absent from the market after being nationalised in 2013. After announcing on 27 September that it will as of 1 January change its name to de Volksbank, the Dutch issuer then mandated leads for a European roadshow ahead of a long dated covered bond return.

Bart Toering, head of funding at SNS Bank, told The Covered Bond Report that the new issue leaves SNS Bank in a good position for future issuance.

“Covered bonds are the safest product in the banking environment, but nevertheless, we were issuing for the first time in four years, and investors want to know you can offer liquid transactions,” he added. “It is important to the investor base to know what you’re going to do as an issuer, what your plans are.”

Toering said the issuer had therefore focussed on informing investors about its future plans, following the rebrand to de Volksbank, and highlighting the strength of its capital position.

“All that together made this quite a safe credit to the investor base,” he said. “We are of course an issuer with some history, meaning our nationalisation.

“But people are now really interested in the story of our bank, and how our figures and ratios will develop.”

Following the completion of a roadshow last week, SNS leads ABN Amro, Commerzbank, Credit Suisse and Société Générale launched the 15 year issue yesterday morning with initial price thoughts of the 12bp-15bp over mid-swaps area. After one hour the leads then announced that orders had surpassed Eu750m, before setting guidance at 10bp plus or minus 1bp on the back of over Eu1.1bn of orders.

The deal was then re-offered at 9bp, on the back of over Eu1.2bn of orders. Bankers saw the deal trading 1bp-1.5bp tighter this (Tuesday) morning.

“For the bank, this is a very good deal, matching long dated mortgage production,” said Toering. “The demand was good and the spread was to our liking and pretty much what we hoped for.”

Syndicate bankers at and away from the leads said the deal offered a new issue premium of around 5bp, seeing ABN Amro April 2031s at minus 6bp, mid, and noting that SNS’s outstanding covered bonds tend to trade 7bp-8bp wider than ABN Amro’s in medium maturities.

“It’s a good price, and sets SNS, or rather de Volksbank, up well,” said a syndicate banker and one of the leads.

The final order book stood at Eu1.1bn with 48 accounts. Asset managers were allocated 38% of the deal, central banks and official institutions 26%, banks 21%, and insurance companies and pension funds 15%. Accounts from the Benelux took 38%, Germany and Austria 27%, the Nordics 13%, Switzerland 10%, southern Europe 6%, the Middle East 3%, the UK 2%, and France 1%.

Toering said the strong participation of Benelux accounts was a highlight of the deal.

“They are familiar with the credit, of course,” he said. “With SNS Bank having been absent for four years, you can imagine the credit work that would need to be done.

“Not all parties had the time for that, but we had a lot of accounts involved, and there was less price sensitivity than we expected.”

Toering said SNS Bank’s next project will be MREL-eligible issuance in 2017, but that that the issuer will return to the covered bond market following its rebrand, most likely next year.

“We are going to become a more regular issuer than we have been,” he said. “Depending on mortgage production, it is likely we will issue again next year.”