Swedish sovereign bonds hit another record low yield

The Kingdom of Sweden $2.25bn three-year benchmark bond was oversubscribed after one hour and sold at 0.498%, the lowest yield on any three year dollar deal this year.

The bid volume was just over $3bn, with central banks acquiring 46% of the issue, said Maria Norström, head of Funding for Riksgälden, the Swedish National Debt Office.

Banks bought 21%, and pension and insurance companies bought 12%, with the remainder bought by asset managers, corporates and private banks, the Office said. By region, some 31% of the bond went to Africa and the Middle East, 24% to Europe and 18% to the Americas.

The price suggests continued high demand for safehaven assets of the kind represented by this bond, the Office added: “Investors are looking for Swedish government bonds. Sweden is a rare borrower with the highest creditworthiness, immune to the volatility in the eurozone. Sweden can take advantage of being one of few issuers that can offer dollar bonds with short maturity at a time when the demand for safehaven credits is large.”

 Terms and conditions  
 Issuer Kingdom of Sweden
 Size USD 2.25 billion
 Coupon 0.375%
 Maturity 18 May, 2015
Price 99.634%
Yield 0.498%
Spread versus Benchmark plus 12 basis points
Spread versus dollar mid swaps minus 19 basis points
Lead managers Barclays, Credit Suisse, Goldman Sachs



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