Sweden issues gov’t bond at another record low

Riksgälden, the Swedish National Debt Office, has issued a €1.5bn three-year bond at another record low yield of 0.725%, with a coupon of 0.625%.

The Debt Office said that the yield was the lowest ever for a syndicated three-year euro deal.

The deal was oversubscribed within an hour of books opening. The final book size was more than €2.8bn, with bids from over 80 investors.

“Once again we seem have to enjoyed the flight to quality, allowing us to price at very attractive levels compared to other sovereigns and swaps. I was surprised to see such a strong demand on a day like this with slow turnover,” said Maria Norström, Head of Funding.

Central banks bought 56% of the issue. Asset managers bought 19%, and corporates bought 14%. The balance was bought by banks, pension and insurance companies.

Over 50% of the bond was sold to European investors outside the Nordic area and 27% to Africa and Middle East. The remainder went to Asia, the Nordics and the Americas.

Lead managers Barclays Capital, Citigroup and JP Morgan agreed that the demand for Swedish government securities continues to be strong, said Norström.

“This transaction represents the tightest ever pricing for a three-year syndicated Euro SSA transaction, reflecting Sweden’s safe haven sovereign status. The speed of book building was all the more impressive as Bunds sold off on the positive developments from Greece.”

Terms and conditions   
Issuer  Kingdom of Sweden
Size EUR 1.5 billion
Coupon 0.625 %
Maturity 20 February, 2015
Price 99.704 %
Yield 0.725 %
Spread versus Benchmark Plus 28 basis points
Spread versus Euro mid swaps Minus 54 basis points
Lead managers Barclays Capital, Citigroup and J.P. Morgan


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