Central banks picked up nearly half of Sweden’s EUR1 billion bond issued Tuesday, in a deal that was the cheapest-ever syndicated transaction completed in euros, the Swedish National Debt office said Wednesday.
The two-year bond priced at 55 basis points below midswaps with a coupon of 0.875%. Central banks bought 49% of the bonds, while banks, corporates and fund managers bought about 14% each.
Sweden is triple-A rated by all the three major ratings agencies and regarded as a safe sovereign credit, making the bond attractive for a broad investor base during the debt crisis.
Other investors included pension and insurance companies. Over 30% of the bonds were sold to Nordic investors, while the remainder went to Eastern Europe, continental Europe, Asia and the Middle East.
“Swedish public finances are among the strongest in Europe and the credit risk is priced among the lowest in the world,” lead managers involved in the deal said. “The level achieved by Sweden is extremely tight, especially in the context of a syndicated transaction and highlights the exceptional standing of Sweden among the international investor community.”
The bond is part of the refinancing of the on-lending foreign currency to the Riksbank.
Danske Bank A/S, Goldman Sachs International and Nordea Markets were lead managers for the transaction.
London, August 24, 2011 (Dow Jones)
