Sparebanken Vest Boligkreditt issued an inaugural green euro benchmark today (Wednesday), a €500m no-grow seven year that attracted €1bn of demand at re-offer and achieved pricing flat to fair value, with lead bankers attributing the zero new issue premium to its green nature.

After announcing the mandate yesterday (Tuesday) for an inaugural green euro benchmark with a seven year maturity, Sparebanken Vest Boligkreditt leads Credit Suisse, ING, LBBW, Natixis, SEB and Swedbank this morning opened books for a €500m no-grow transaction with guidance of the mid-swaps plus 15bp area. After an initial update reporting books over €1bn, including €50m joint lead manager interest, guidance was revised to 12bp+/-1bp, WPIR, on the back of over €1.1bn of demand, excluding JLM interest. It was ultimately priced at 11bp, on the back of around €1bn orders, including JLM interest.

Syndicate bankers at the leads deemed it a success, citing pricing flat to fair value, when the last two euro benchmarks, from Berlin Hyp and NN Bank, as well as an issue from Rabobank last week, paid 1bp-2bp of new issue premium.

“The green element helped it get an extremely tight outcome,” said one. “I would attribute 1bp-2bp or so towards the green benefits they have received on this deal.”

Some investors complimented the issuer on the comprehensive and detailed nature of its green bond framework, he added, which translated into more demand.

“We definitely saw some good green money come through,” he said.

Sparebanken Vest’s new issue also came 1bp inside where the last Norwegian benchmark, a €750m seven year transaction from SR-Boligkreditt, was priced on 18 June, at 12bp, noted another lead banker.

“The SR deal from two weeks ago provided some strategic starting points in contemplating an issue like this,” he said, “but this being green, we were hoping to come inside what they achieved, and luckily we managed to do that.”

He attributed this to the strong participation from green investors, which tend to be less price sensitive than average, highlighting the trade lost only €100m of orders from the wide to the tight.

“Given the nature of the funds they hold, they just need this,” he said, “so that was clearly helpful in gathering the pricing that we ended up with here.”

A syndicate banker away from the leads said the deal went well and was a “good Norwegian standard”, agreeing that it had come flat to slightly through fair value. However, he was sceptical about the extent to which the green label may have benefited the execution.

“I’m not sure if it had a major impact in terms of pricing and placement,” he said.