Norway’s Sbanken Boligkreditt and Poland’s mBank Hipoteczny launched comfortably oversubscribed and well received euro debuts today (Thursday), and were able to tighten pricing for their respective EUR500m five year and EUR300m short seven year transactions.

After finishing a roadshow on Tuesday, Sbanken gave an update on its plans yesterday (Wednesday), noting that feedback pointed towards a five year maturity and that a EUR500m no-grow deal would be launched in the near future, subject to market conditions.

This morning leads LBBW, Natixis, Nordea and UniCredit opened books for the EUR500m deal with initial guidance of the 7bp over mid-swaps area.

A syndicate banker at one of the leads said that finding fair value for the inaugural issue was quite difficult, but they considered where a new DNB five year would be priced, and came to a starting point of flat to slightly through mid-swaps.

“People on the road signalled an interest in something in swaps plus territory,” he said, “and we thought that by an extra 4bp-7bp would work.”

Orders topped EUR1.1bn after a couple of hours and guidance was revised to the plus 5bp area, before the re-offer was set at 3bp over on the back of books above EUR1.3bn, including EUR30m joint lead manager interest, with EUR1.25bn ultimately good at re-offer.

“I was positively surprised that we were able to tighten pricing by 4bp to plus 3bp,” said the lead syndicate banker.

He said that the issuer had done a very good job on the roadshow, with the participation of over 75 accounts testament to how it had been received. He added that the strength of the credit, that it is from Norway, and non-CBPP3 eligible were all factors playing in favour of the deal.

He also noted that the market remained constructive in spite of continued heavy supply, with investors still cash rich and technical supportive.

mBank Hipoteczny was able to go ahead with its euro debut following clarification of a tax issue that had previously held it up, and held a roadshow earlier this week.

Leads Commerzbank, Erste, JP Morgan, LBBW and SG this morning went out with initial price thoughts of the high 40s over mid-swaps for the March 2025 deal, tightened to guidance of the 45bp area after having attracted EUR850m of demand, and set the re-offer at 42bp over on the back of books over EUR900m, excluding joint lead manager interest.

A syndicate banker at one of the leads said that the main pricing reference had been PKO, the only other issuer of Polish euro benchmarks so far. PKO January 2024s issued last month were at 25bp mid and January 2023s at 19bp-20bp, and he said that, taking into account 5bp for the longer maturity, fair value for PKO in the March 2025 part of the curve would be 30bp. Given that PKO would have to pay a new issue premium, mBank’s 42bp was an achievement, he said, considering that it was an inaugural trade, a sub-benchmark, and slightly lower rated, all of which could have restrained demand.

“The reception was extremely solid, particularly bearing in mind the current market conditions, where some deals have not received satisfactory demand,” he said.

“It’s been a really pleasant journey bringing mBank to the market,” he added, “and it’s good to see the Polish issuer universe expand with a second name, also extending the curve.”

The short seven year deal was priced with a coupon of 1.073%, and the lead syndicate banker noted that this 1%-plus number would have been an attraction for investors. German accounts led demand, he said, with around half going to banks and half to real money accounts.