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Excellent start to KBN 2021 funding program

KBN took advantage of an early funding window in the new year and managed to engage investors in a record size benchmark at a record low spreads vs. US Treasury.

07.01.2021 / News

On Wednesday January 6, KBN priced a new USD 2bn 5year benchmark at MS+9bps. This represents the tightest 5yr benchmark vs UST to date.

KBN reacted swiftly to the favourable demand dynamics and constructive market tone early in the year. The transaction enjoyed a very strong reception from the outset, and momentum continued throughout the European morning with high quality demand coming from across the investor. Orderbooks ultimately closed in excess of USD3.5 billion, allowing KBN to comfortably set the size of the transaction at USD2 billion; representing KBN’s largest USD benchmark since 2013.

“We took advantage of an early funding window in the new year and managed to engage investors in record size at record low spreads vs. US Treasury confirming the strength of current markets and the appeal of KBN as a credit. An excellent start to our 2021 funding program,” says Head of Funding and IR at KBN, Thomas Møller. 

With 83 accounts paricipating globally, the transaction was broadly diversified across Asia (19%), EMEA (46%) and the Americas (35%). Central Banks & Official Institutions were the largest investor component taking 46% of final allocations, supplemented by strong participation from Bank Treasuries (40%), Asset Managers (11%) and Insurance & Pension Funds (3%).


Robert Matthews, SSA DCM at BNP Paribas

“Huge congratulations to the KBN team for an outstanding start to 2021 and setting a benchmark for others to follow. Being able to print their joint largest ever transaction ahead of the large supply expectations for Q1 is a testament to the support KBN receives from the global investor base.”

Angelica-Maria Strolz, Executive Director at J.P. Morgan

“KBN's flexibility and swiftness enabled the issuer to take advantage of a clear, early issuance window, and a favourable yield backdrop. The agency achieved its largest USD benchmark size since 2013, and the tightest mid-swap spread for a 5-year USD transaction since 2015. Congratulations to the KBN team!"

Spencer Dove, Managing Director, Head of SSA DCM at Nomura

“What a way to start 2021, an outstanding transaction for Kommunalbanken and thoroughly well-deserved by the team. Easily the strongest and most diverse orderbook I have seen for the issuer and a testament to KBN’s global reach. With total orders in excess of $3.5bn and a tightest ever UST spread and joint largest transaction this deal really stands out! Nomura is delighted to have been part of the team on this deal.”

James Taunton, Director at RBC Capital Markets

“A truly fantastic transaction to re-open the USD agency market in 2021. KBN’s ability to launch their largest USD benchmark since 2013 & joint largest to date, with no concession to the curve is a real testament to the tireless efforts ofthe KBN team in engaging with the global investor base. A really great outcome and RBC was delighted to have been involved.”

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