SpareBank 1 Boligkreditt is preparing to issue an inaugural sterling-denominated benchmark covered bond, having today (Monday) announced a mandate for a roadshow ahead of a fixed or floating rate deal, with the sterling market currently offering attractive funding levels compared to alternatives.

The Norwegian issuer announced today that it has mandated Credit Suisse and HSBC to arrange a UK roadshow that will start on Wednesday, after which a sterling benchmark fixed or floating rate note covered bond with an intermediate maturity may follow. The roadshow is expected to run for two to three days, according to a banker at one of the leads.

SpareBank 1 Boligkreditt’s non-domestic issuance to date has been focused in euros. It has issued US dollar benchmark covered bonds, but the last of these came in April 2013, while it also has one Swedish krona bond outstanding, a Skr250m May 2022 issue.

The deal will be the first sterling benchmark from Norway since Nordea Eiendomskreditt sold a £400m (Eu452m, Nkr4.28bn) three year FRN in January 2016.

“SpaBol should be an interesting addition to the sterling market, given the rarity of sterling paper from that country,” said a syndicate banker away from the deal. “Nordic sterling paper tends to trade roughly in line with some of the tighter, non-UK issuers in that market, so it will be interesting to see what kind of spread they end up with.”

Bankers said the sterling covered bond market currently offers funding levels roughly flat to what SpareBank 1 Boligkreditt would be able to achieve in the euro market, and slightly inside US dollars.

“The sterling option does look quite attractive,” said one.

The last sterling benchmark covered bond supply came late last month, with Swedbank Hypotek selling a £250m long four year FRN on 25 September and Aareal Bank a £250m short three year fixed rate issue the following day.