Stadshypotek attracted over Eu850m of orders to a Eu500m seven year covered bond today (Tuesday) that some bankers estimated had been priced flat to or even through its interpolated curve, with the deal’s comfortable success attributed to the strength and popularity of the Swedish issuer.

Stadshypotek leads Commerzbank, Nomura, Société Générale and parent Svenska Handelsbanken launched the Eu500m (Skr4.74bn) no-grow seven year issue this morning with guidance of the 2bp over mid-swaps area. Guidance was revised to the flat area, before the deal was re-offered at minus 1bp with the books in excess of Eu850m.

“This is clearly a good transaction at quite a punchy price,” said a banker away from the leads. “They are a very strong name and therefore always have a loyal following, even though they tend to be on the expensive side of things, even by Scandinavian standards.”

The deal is the tightest euro benchmark with a maturity of seven years or longer to be sold outside of Germany or France this year.

Some bankers away from the leads said the deal had been priced 1bp through fair value, seeing Stadshypotek’s February 2023s at minus 1bp, bid, and October 2026s at 4bp.

They also cited the only other seven year Swedish euro benchmark to be sold this year, a Eu1bn issue for Swedish Covered Bond Corporation (SCBC) that was priced at 2bp over mid-swaps on 9 January and seen bid at flat this morning.

Citing mid levels, other bankers – including those at the leads – said the deal either came flat to fair value or offered a 1bp premium, seeing Stadshypotek February 2023s at minus 2bp, mid, and the October 2026s at 2bp.

“Whichever way you look at it, it’s an impressively tight print,” said one.

Bankers estimated that an equivalent Swedish krona-denominated deal would have offered Stadshypotek a saving of around 5bp-7bp versus the euro spread.

“Recent krona trades, like SCBC’s yesterday (Monday), have shown that Swedish issuers can get equivalent sizes in the domestic market,” said a banker away from the leads. “But that is perhaps a special case, and I think Stadshypotek’s choice of currency reflects the importance of the euro market.”

Swedish Covered Bond Corporation issued a Skr5bn (Eu527m) long nine year covered bond yesterday (see separate article).

Further euro-denominated covered bond supply is expected this week, with issuers from a range of jurisdictions said to be monitoring the market with a view to launching deals after exiting their blackout periods.

“There is nothing on screens yet,” said one, “but I’m sure this won’t be a one-deal week.”