Solid 5-year USD Benchmark
On 12 January, KBN priced a new USD 1.25 billion 5-year benchmark. The transaction enjoyed a broad and global distribution with a final orderbook in excess of USD 1.75 billion.
KBN reacted to the favourable demand dynamics and constructive market tone to announce the first 5-Year USD Benchmark from an agency issuer in 2022. The transaction enjoyed a strong reception from the outset, with indications of interest in excess of USD 1.4 billion (excl. JLM). Given the size and high quality of the interest already reflected, spread guidance was revised 1bp tighter at book opening from IPTs to SOFR MS+28bps area.
- A solid start to our 2022 funding program. The trade garnered broad interest in a well diversified book giving us the opportunity to tighten price by 2bp. from initial price talk, says Thomas Møller, Head of Funding & IR at KBN.
Momentum continued throughout the European morning with high quality demand coming from across the investor spectrum; reaching in excess of USD 1.9 billion (excl. JLM). The spread was subsequently tightened and fixed at SOFR MS+27bps, 2bps tighter than IPTs. Orderbooks ultimately closed in excess of USD 1.75 billion (excl. JLM), allowing KBN to comfortably set the size of the transaction at USD1.25 billion.
In terms of geographical distribution, the transaction was broadly diversified across EMEA (48.0%), Americas (42.3%) and APAC accounts (9.7%). Banks were the largest investor component taking 54.7% of final allocations,supplemented by strong participation from Central Banks & Official Institutions (43.2%), Fund Managers / Insurance (1.0%) and Other accounts (1.1%).
Joint Lead Manager Quotes:
"A successful return for KBN to the 5-year sector following their October 2021 outing. In a very busy primary environment,
the issuer was able to garner significant focus from high quality investors at a tight spread. The broad geographical and
sectoral distribution of the transaction is a testament to KBN's enduring appeal."
Adrien de Naurois, Managing Director, Head of DCM SSA & EMEA IG Syndicate, Bank of America Merill Lynch
“Congratulations to the KBN team! Kicking off the 2022 funding programme in style, as the first Nordic agency to access
the USD market. Today's new 5-year, priced 2bps inside of IPTs and increased size to their cap - on the back of a highquality orderbook, a testament to KBN’s global recognition in the capital markets”.
Elena Farrell, Director, HSBC
“KBN has yet again smoothly executed a solid benchmark transaction in the USD market – with a 2bp spread tightening
throughout the process, thanks to a healthy oversubscription from quality accounts. The issuer’s first USD outing of the
year sets the stage well for a further reopening of the agency sector’s primary issuance in 2022.”
Matthieu Batard, Head of SSA Syndicate, J.P. Morgan
“KBN have once again re-opened the 5-Year USD Agency market for the year with this impressive transaction. Their
ability to attract such a high quality orderbook of $1.75bn+, particularly amidst such a busy primary market, is a clear
testament to the unwavering commitment of the global investor base. Congratulations to the KBN on this fantastic
outcome; RBC was delighted to have been involved on this successful transaction.”
James Taunton, Director, RBC Capital Markets
