Strategy: Sweden - Introduction Of SEB575

Published 11/14/2017, 05:34 AM

On Tuesday 14 November (depending on market conditions), SEB is set to introduce a new loan (SE0010546572), due to mature on 21 December 2022. The coupon rate is set at 1.5%. SEB targets an initial volume reaching benchmark size (SEK5bn). The bond is set to become part of the SEK benchmark programme.

The current SEB 5Y covered bond matures in December 2021, thus it is a 4Y bond, so the introduction of a new 5Y benchmark is likely to be widely expected. A few of the covered bonds issuers have been issuing new 5Y benchmark bonds after the summer. However, the funding need seems limited as the plan is not to issue more than SEK5bn of the bond to reach benchmark status. Last week, SEB issued a 10Y covered bond in the EUR market at a level roughly equal to SEK swap +40bp. In comparison, the SEK bonds look cheap.

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