On 12 March 2019, KommuneKredit launched a new USD benchmark transaction. The mandate for the new issue was announced in the market on Monday 11 March in conjunction with a switch and tender offer in two of KommuneKredit’s existing USD bonds maturing in August 2019 and January 2020 respectively.
Indications of interest grew over night to more than USD 2.3bn in new money and switches and books opened at mid-swaps +7 bps. As the issue size was capped at USD 1bn and orders stood strong at more than USD 2.8bn, books were closed at 9.00 am London time and the spread was fixed at mid-swaps + 7 bps.
The order book represents the largest-ever book for a KommuneKredit USD benchmark with a pricing of 1-1.5 bps. through fair value and spread over the 3Y Treasury of 15.5 bps.
The result of the switch and tender offer was a total buy-back of USD 449.7m in the August 2019 and January 2020 issues.
More than 65 investors participated in the issue with particularly strong participating from central banks, official institutions and bank treasuries.
Joint Lead Managers on the issue were: BMO Capital Markets, HSBC, RBC Capital Markets and TD Securities.
For further detail please read the Press Points.