SR-Boligkreditt launched the first Nordic euro benchmark in over three months today (Thursday), a seven year upsized to €750m on the back of as much as €1.5bn of orders at a limited NIP, but UniCredit HVB achieved modest oversubscription on a €1bn 10 year despite paying a premium of some 4bp.

Following a mandate announcement yesterday (Wednesday), SR-Boligkreditt leads Barclays, Citi, DZ, HSBC and LBBW went out with guidance of the mid-swaps plus 16bp area for the Norwegian seven year euro benchmark-sized transaction. After around an hour and five minutes, books were reported as being over €1bn, excluding JLM interest, and after around two hours and 35 minutes, the spread was set at 12bp, on the back of over €1.5bn of demand, including €165m JLM interest. The issue size was ultimately set at €750m, on the back of over €1.3bn of demand, including €165m JLM interest.

A syndicate banker away from the leads said it was a good result for the issuer, coming with 1bp-2bp of new issue premium.

“The book is at the larger end of the books we have seen this week,” she said.

Citing SR-Boligkreditt October 2025s and October 2026s at 10.7bp and 10.2bp, respectively, a lead banker said the new issue was priced roughly flat to fair value – and slightly inside compatriots DNB Boligkreditt and SpareBank 1 Boligkreditt.

“No new issue premium is a very decent result, because of late supply has had a little bit of a NIP on it,” he said, “and kudos to them for coming a smidge inside DNB and SpaBol.”

He attributed the issuer’s ability to take size without compromising on spread to a scarcity of Scandinavian supply, noting the Norwegian issue is only the fifth Scandinavian euro benchmark this year, and the first to be issued since the peak of the Covid-19 crisis.

“Their target was €500m,” he added, “but given the strength of demand, coupled with the quality and size of the book, they were able to upsize it to €750m – which is now the equal-largest trade they have out there.”

Considering the extent to which levels have recovered, it was only a matter of a time before a Norwegian name approached the market, said another lead banker.

“Life has now become attractive again for them in the euro primary market,” he added.

He said that although euro benchmarks this week have invariably become more difficult to place, the issuer was able to get a good trade done at a decent pricing level.

“It indicates that with the proper indication strategy, these somewhat richer transactions still stand a good chance to find a home,” he added.

Following a mandate announcement yesterday, UniCredit Bank AG (HVB) leads Helaba, Lloyds, LBBW, Santander and UniCredit this morning went out with guidance of the mid-swaps plus 12bp area for a 10 year euro benchmark-sized Hypothekenpfandbrief. An initial update reported books in excess of €1bn, and the spread was ultimately set at 10bp and the issue size at €1bn, on the back of over €1.25bn of demand, including €40m JLM interest, good at re-offer.

A syndicate banker away from the leads said it was more challenging than SR-Boligkreditt, noting it paid a higher new issue premium, based on fair value at 6bp.

“4bp of NIP is a bit on the high side of what we’ve seen,” she said, “and given that supply has been so limited, I would have expected a tighter landing.”

Another banker away from the leads also put fair value at 6bp, saying this was considerable when compared with a DZ Hyp €1bn eight year transaction yesterday (Wednesday) that was priced flat to or even through fair value.

“The environment has changed quite a lot from one day to the next, so maybe for certain names, it’s time for some new issue premium,” he said. “There’s no shame in that.”

A lead banker said the result was in line with expectations, as the Italian-owned issuer typically trades wider than its compatriots, and because it came late in a busy week when the market has become less receptive.

“We’re still talking about a €1bn deal here,” he added. “But there’s no beating around the bush – the ECB was involved, oversubscriptions were thinner, and this led to a higher premium.”

He said there was no real disappointment among the issuer and leads, as the rapid tightening of spreads could not be expected to last indefinitely.

“It’s an OK development in terms of demand,” he added, “as it feels like more of a soft landing, rather than, ‘brace!’ We’re back to where we were earlier this year.”

While demand for the six euro benchmarks launched this week has waned relative to last month, the outcome of today’s HVB issue and that of Axa Bank Europe SCF yesterday – whose result was also at the lower end of price and demand outcomes – were very name-specific, according to another syndicate banker.

“I wouldn’t read much into it yet,” he said. “DZ Hyp yesterday certainly went well and SR today, too, so we’ll have to see what happens going forward. I expect this pace of issuance to be maintained next week and the week afterward.”

Another syndicate banker was more measured in his expectations, saying the more “sober” execution of the past few days could have contributed to the pipeline being modest.

“If this week had continued in the mood of last week,” he said, “next week would’ve probably been outrageous, but given what’s happened, I doubt it.”