KommuneKredit issues inaugural SOFR-linked FRN

On Thursday 9 September 2021, KommuneKredit issued its inaugural SOFR-linked Floating Rate Note; a 4-year USD 700 million bond. The transaction attracted a high quality orderbook with particularly strong support from the bank treasury community.

The mandate for KommuneKredits inaugural 4-year USD 700 million SOFR-linked bond was announced on Wednesday 8 September at 10:45 CET. Books opened the following day at 9.15 CET with guidance at SOFR+19bps area, flat to IPTs, and IOIs over USD 510 million. At 11:45 CET the books reached more than USD 740 million, at which point the spread was set 1bp tighter, at SOFR+18bps. The high quality orderbook, which was particularly supported by the bank treasury community, allowed KommuneKredit to close the final orderbook in excess of USD 725 million at 17.20 CET.

“We are very pleased that our inaugural RegS SOFR issue was received so well by the investors that books closed in excess allowing us to upsize the transaction”, says Senior Funding & IR Manager of KommuneKredit Louise Rosentoft and continues: “This transaction shows KommuneKredits support of the transition towards the new interest rate indices thus meeting the investors' interests and needs”.

COMMENTS FROM THE BOOKRUNNERS

“This transaction is a remarkable result for KommuneKredit’s inaugural SOFR transaction. By intelligently using the full benefit of its high credit quality and rarity value, the KommuneKredit team has successfully managed to exceed its size target with minimal concession, despite executing in a week of heavy USD supply. The high quality of the final orderbook confirms the continued support that the issuer enjoys from its investor base”.

Alexander Paterson, Director, SSA DCM, Barclay

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“Many congratulations to the KommuneKredit team for their inaugural SOFR-linked transaction. Despite a busy week in primary, the trade captured the attention of a broad range of investors, which allowed KommuneKredit to successfully achieve its pricing and sizing ambitions”.

Ben Adubi, Head of SSA Syndicate, Morgan Stanley

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“Congratulations to the KommuneKredit team on a very successful and well-timed debut transaction in a USD SOFR-linked format. KommuneKredit’s decision to capitalise on the conducive primary market backdrop was welcomed by investors as the issue size was upsized and final spread was set tighter than initial guidance”.

Bob Nguyen, Global Head of Fixed Income Origination, Scotiabank