Eika Boligkreditt attracted Eu900m of orders to a Eu500m seven year covered bond today (Tuesday), pricing the deal with a marginal new issue premium versus its secondary curve while closing the gap to traditionally tighter-trading Norwegian names. A Wüstenrot Bausparkasse sub-benchmark is expected tomorrow.

Eika Boligkreditt announced yesterday (Monday) afternoon that it had mandated Crédit Agricole, Danske, Natixis, Nordea and UniCredit to lead manage the Eu500m no-grow seven year issue.

The deal was launched this morning with guidance of the mid-swaps minus 3bp area. Guidance was later revised to the minus 5bp area on the back of around Eu800m of orders, including Eu40m joint lead manager interest, before the deal was priced at minus 6bp, with books at Eu900m.

“It seems a smooth trade,” said a banker away from the leads. “They brought the price in well to end up with a small concession, and got a good book without the help of the ECB purchase programme.”

Syndicate bankers said the deal offered a new issue premium of 1bp-2bp, seeing Eika February 2024s at minus 7bp, mid, and SR-Boligkreditt October 2024s, which were priced at mid-swaps flat on 26 September, at minus 8bp.

The last euro benchmark from Norway was a Eu1.5bn seven year for DNB Boligkreditt that was priced at 9bp through mid-swaps on 10 November and seen trading at re-offer today. Bankers noted that the spread differential between Eika and DNB – traditionally the tightest of the Norwegian issuers – has compressed substantially this year.

“Looking at how Eika have priced historically, it is impressively tight to DNB,” said one.

The deal is Eika’s second benchmark covered bond of the year, following a Eu500m seven year in February. Eika’s covered bonds were then rated Aa1 by Moody’s – making the issuer an outlier in the mostly triple-A Norwegian market – and the issuer itself was not rated. Bankers noted that this meant some accounts could not participate in the deal.

However, Moody’s assigned the issuer a first public rating in June, and consequently upgraded its covered bonds to Aaa.

Wüstenrot Bausparkasse announced a mandate this afternoon for an inaugural sub-benchmark, eight year mortgage Pfandbrief, with an expected size of Eu250m. A syndicate banker at one of leads Commerzbank, DZ and LBBW said the deal will be launched tomorrow, subject to market conditions.

The issuer completed a European roadshow last week, marketing a recently established mortgage Pfandbrief programme.