The Kingdom of Sweden has raised EUR 4 billion in a new bond. This corresponds to roughly SEK 43 billion. The euro bond should be seen as an act of caution to limit the need of increasing funding in krona bonds. The economic outlook looks, according to among other the National Institute for Economic Research and the Ministry of Finance, somewhat worse than our latest forecast published in March.
For the first time in more than ten years, the Kingdom of Sweden issues in euro. The bond has a five-year maturity and is issued in the euro market.
"Demand exceeded our expectations and the bond was bought by a very large number of investors. The euro issue gives us the possibility to broaden the investor base at a time when we may face an increase in the borrowing requirement. The weak krona means that this funding could be cheap in the long run", says Deputy Head of Funding Maria Norström.
Terms and conditions
|
Issuer |
Kingdom of Sweden |
|
Size |
EUR 4 billion |
|
Coupon |
3.125 % |
|
Maturity |
7 May, 2014 |
|
Price |
99.973 |
|
Yield |
3.131 |
|
Spread versus Euro mid swaps |
+ 45 basis points |
|
Lead managers |
Barclays Capital, BNP Paribas, Citi, Nordea Markets |
|
Co-leads |
Calyon, Credit Suisse, Danske Bank, Daiwa, UBS |
The buying interest was very strong and the investor base much broader than in the Kingdom's earlier foreign currency bonds. 31 per cent of the bond was placed with central banks, 25 per cent with banks, and 44 per cent with funds and pension funds. More than 75 per cent was distributed to European accounts, of which 29 in the Nordic region.
Lead manager comment: "The recognised strong credit quality of Sweden as an issuer was a key driver for investor demand and resulted in an order book of extremely high quality. The order book closed in excess of EUR 5 billion with more than 175 different geographically diverse investors, which is a fantastic result".
For more information, please contact:
Maria Norström, Deputy Head of Funding, +46 8 613 46 35