Svenska Handelsbanken
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Financial institutions bond bankers are struggling to build a new pipeline of issuance, despite a significant improvement in market conditions this week. Not only are banks entering blackout periods ahead of first quarter results, many of them are also happy to wait before seeking to raise new funding. -
The Swedish national debt office (Riksgälden) said on Tuesday that banks would have two extra years to raise non-preferred senior debt for their minimum requirements for own funds and eligible liabilities (MREL). The announcement came a day after Svenska Handelsbanken sold an ordinary senior deal in the euro market.
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Svenska Handelsbanken attracted €8.5bn of demand for a new preferred senior bond on Monday, as credit markets started the week on a strong footing. The Swedish lender said the transaction would help it to ‘prudently manage’ its liquidity position.
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Pockets of stability in the Swedish market drove demand across the curve this week, allowing investors the chance to pick up a handful of well-known SSA names at highly attractive levels.
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Nordic banks Länsförsäkringar Bank (LF Bank) and Landsbankinn were able to offer “attractive value” in the preferred senior market this week, amid a general hunt for yield among credit investors.
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The euro market had no trouble digesting a pair of similar trades from Landesbank Baden-Württemberg (LBBW) and Svenska Handelsbanken this week, with both banks printing non-preferred senior bonds at 58bp and paying a small new issue premium to investors.
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Swedish issuer Kommuninvest is preparing to launch its first deal of 2020 — a five year Swedish krona note.
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ABN Amro and Deutsche Bank opened books on new senior deals in the sterling bond market, with bankers recognising that the currency is 'working very well' for international names.
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Sweden’s Peab has almost doubled the size of its local currency credit facility, with the construction and civil engineering company releasing a chunk of the financing once an acquisition finalises.
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Financial institution investors, desperate for any sort of yield pick-up are keeping their cash away from secondaries in the hope of earning new issue concessions in a rejuvenated primary market.
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Investors in unsecured bank debt instruments are unlikely to put up much of a fight against the inevitable march into negative yielding new issuance.
