Swedish Covered Bond Corporation (SCBC) priced a EUR750m seven year covered bond today (Monday) at the joint-tightest post-crisis Swedish spread, prioritising price over size after a relatively slow bookbuilding process, which nevertheless generated over EUR1.1bn of orders.

The new issue is the first euro benchmark covered bond from Sweden since November, and SCBC’s first since last March, when the SBAB subsidiary sold a EUR750m 10 year.

SCBC announced on Friday morning that it had mandated Barclays, HSBC, LBBW, Nordea and UBS to lead manage a seven year euro benchmark covered bond.

The deal was launched this morning with guidance of the mid-swaps minus 5bp area. After around one hour and 45 minutes, the leads announced that books had exceeded EUR1bn, including EUR35m joint lead manager interest.

Guidance was subsequently revised to the minus 7bp area, plus or minus 1bp will price within range, with books over EUR1.1bn, excluding JLM interest. The spread was later set at minus 8bp and the size at EUR750m.

The deal is the joint-tightest post-crisis Swedish spread in the euro covered bond market, matching a EUR750m seven year issue for Stadshypotek that was priced at minus 8bp on 29 November.

Bankers away from the leads noted that the deal had progressed relatively slowly, with the spread fixed almost four hours after the deal was launched, but, highlighting the price, said it was nevertheless a solid result.

“The oversubscription is not huge and it would not be surprising if they lost some orders in the move to minus 8bp,” said one, “but minus 8bp is a good price for a Swedish covered and they still got it over the line comfortably.”

Another syndicate banker agreed.

“It looks like they decided that EUR750m at minus 8bp was better than a somewhat squeezed EUR1bn at minus 7bp,” he said. “I would assume they still have a decent level of oversubscription at the final spread.”

The leads had not disclosed the final size of the order book at the time The CBR went to press.

The deal was deemed to have offered a new issue premium of around 2bp, with bankers citing SCBC June 2022s at minus 13bp, mid, February 2024s at minus 12bp, and March 2027s at minus 8bp.