SpareBank 1 Boligkreditt launched its first sterling-denominated benchmark covered bond today (Monday), a five year FRN that is set to secure funding well inside what would have been achievable in euros.

The Norwegian issuer announced plans to enter the sterling market last Monday and embarked on a UK roadshow on Wednesday, with leads Credit Suisse and HSBC, ahead of either a fixed rate or floating rate issue.

The five year FRN was then launched this morning with initial price thoughts of the three month Libor plus 30bp area.

Syndicate bankers away from the leads said the IPTs compared very favourably to the price SpareBank 1 Boligkreditt would be able to achieve in euros, calculating three month Libor plus 30bp to be roughly equivalent to a euro level of mid-swaps minus 10bp.

The issuer’s last euro benchmark, a Eu1bn seven year on 19 June, was priced flat to mid-swaps – as was the last Norwegian euro benchmark, a Eu500m seven year for SR-Boligkreditt on 26 September.

“It’s a very, very good level for the issuer, and you’d expect them to be able to tighten the spread further as the book builds,” said a syndicate banker away from the leads. “It shows that the sterling market currently offers a good opportunity and the market should now be open for others.”

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