KommuneKredit issues new 375m GBP 3-year benchmark
On Tuesday 12th November, KommuneKredit priced a new GBP 375 million benchmark transaction maturing 19th of November 2027 at SONIA MS+39bps representing a spread of 29.4bps over UKT 1 ¼ 07/22/27.
On Tuesday 12th November KommuneKredit decided to take advantage of the clear issuance window and announced its second syndicated transaction in the Sterling market in 2024. The strong investor support allowed the transaction to tighten by 1bp from guidance of SONIA MS+40a and upsize from GBP250m to GBP375m.
The syndicate group, consisting of Barclays, HSBC and RBC, opened the book at 10:55am CET with guidance at Sonia MS+40 area and size indications of GBP250m. Early on, GBP250m was well covered with books in excess of GBP310m, allowing KommuneKredit to set spread 1bps tighter at Sonia MS+39bps at 12.20 CET. With spread set, the orderbook continued to grow. By 13.20 CET books closed in excess of GBP425m (incl. GBP25m JLM interest) and the deal size was set at GBP375m, making it our second largest Sterling trade on record.
At 14:35 CET, the transaction officially priced at Sonia MS+39bp, equivalent to a reoffer yield of 4.588% and 29.4bp over the UKT 1 ¼ July 2027
The largest proportions of investors came out of Europe, with 62% from the UK region and 19% from non-UK EMEA accounts. In terms of investor type, the bulk of demand came from Banks/Bank Treasuries and Central Banks/Official Institutions (44% and 32% respectively), with strong participation also from Asset Managers, Pension Funds and Insurances (24%)
Even though it's late in the year and markets have experienced turbulence due to the presidential election and other key events, we saw an overwhelmingly strong response to our GBP transaction and decided to upsize from the initial GBP 250 million to GBP 375 million. We are delighted that GBP investors have shown such strong support for our name and have prioritized our credit in their portfolios.
Louise Rosentoft
Senior Funding & IR Manager
LEAD MANAGER QUOTES
"Congratulations to the KommuneKredit team for successfully executing the first new GBP benchmark in the SSA market after the US elections. The high-quality orderbook not only supported KommuneKredit to tighten the spread during execution but also allowed the issuer to upsize the final deal size to GBP375m which represents their second largest GBP transaction on record. Barclays was honoured to be involved."
Francesco Polon, Director, SSA Origination at Barclays
“HSBC is delighted to have been a part of KommuneKredit’s new GBP375m 3-year Sterling line. The trade was very well timed, issuing after a busy period of politics and macro data dominating the market. The strength and quality of the orderbook supported a larger-than-expected deal size of GBP375m, with final books in excess of GBP425m. Congratulations to the KommuneKredit team on the excellent result!”
Amy Greenwood, SSA Syndicate, HSBC
"Congratulations to the KommuneKredit team on successfully navigating volatile market conditions to take advantage of a clear issuance window and conducive market conditions following recent event risks; launching an upsized new 3-year GBP benchmark, on the back of strong investor demand. This rounds out another successful year for KommuneKredit’s capital markets funding & is a testament to KommuneKredit’s strong recognition within the Sterling investor community."
James Taunton, Head of SSA DCM, Europe, RBC Capital Markets