KommuneKredit launches new 5-year USD 1 billion benchmark
23 May 2023Tuesday morning 16th May KommuneKredit announced an upcoming USD-benchmark with initial-price-thoughts of SOFR MS+47bps area.
The transaction enjoyed a very strong reception and had, by the time books opened just after 09.00 CET on Wednesday morning, gathered indications of interest in excess of USD 1.9 billion (incl. USD 100m JLM). Guidance was announced at SOFR MS+45bps area, 2bps tighter than IPTs.
Momentum continued throughout the morning. By the time of the first update at 09.55 CET books had reached in excess of USD 2.6 billion (incl. USD 100m JLM), and the spread was tightened and fixed at SOFR MS+44bps, 3bps tighter than IPTs.
At 11.25 CET it was announced that the orderbook closed in excess of USD 3.1 billion (incl. USD 100m JLM).
In terms of geographical distribution, the transaction was broadly diversified across EMEA (59%), Americas (23%) and Asia accounts (18%). Central Banks & Official Institutions were the largest investor component taking 51% of final allocations, supported by strong participation from Banks & Bank Treasuries (45%) and Fund Manager / Pension Fund / Insurance accounts (4%).
Statement from KommuneKredit:
Louise Gregersen, Senior Funding & IR Manager
“We’re thrilled to see, that our long-term commitment to USD as a strategic funding market is recognized by the international investor community, and equally pleased to see our investors benefit from the immediate performance of the bond.”
Lead Manager Quotes
“Congratulations to the KommuneKredit team for a great USD 1bn 5-year outing. The 5-year maturity hasn’t always been easy to access for agency issuers, but the USD 3bn orderbook – the largest ever for a KommuneKredit USD benchmark – is testament to the great name recognition that the issuer enjoys in the USD market. The final pricing of MS +44 represents zero new issue premium vs recent supply and secondary comparables. Congratulations again to the team!” Massimo Antonelli, Managing Director, BMO Capital Markets
"Congratulations to the KommuneKredit team on a fantastic outcome. The transaction extends KK's curve with a new liquid reference point, as well as marking its return to the US$ market for the first time since January 2022. The issuer successfully navigated competing supply, and the deal met with exceptionally strong demand being three times oversubscribed and with pricing 3bp tighter than IPT’s.” Jez Walsh, MD, Head of Debt Syndicate, Daiwa Capital Markets Europe
“A true statement of strength delivered by KommuneKredit today, returning to the USD market. KommuneKredit’s long-term work engaging with investors globally is certainly paying dividend and another solid transaction can be put to the records here.” Anna Sjulander, Head of SSA Origination, SEB