Starting on Tuesday May 22 (dependent on market conditions), SEB is set to introduce a new benchmark loan (SE0010049841), which matures on 20 December 2023. It will be one year longer than the shorter benchmark bond SEB575 (Dec 2022). There is another covered bond issued by SEB, SEB578, which matures on 1 December 2023 but this one is no benchmark bond and with only SEK3.6bn issued, it gives limited guidance in terms of pricing for the new SEB576. The coupon rate on the new bond to be introduced is set at 1%. SEB targets an initial volume reaching benchmark size (SEK5bn).
Over the past couple of weeks, SEK covered bonds have slipped a little in terms of performance relative to SGBs and swaps. We see the somewhat struggling EUR covered bond market and issuance of new 5Y bonds from more issuers in the pipeline as reasons for the small underperformance recently. However, once this bond is in the market, we expect the pipeline of new 5Y bonds to dry up for now. At the same time, we are approaching the June index rebalancing, where we expect domestic investors to do extension trades along the covered bond curve.
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