News -
KommuneKredit issues new 1bn USD 5-year benchmark
On Wednesday 5th of March 2025, KommuneKredit priced a new USD 1 billion benchmark transaction maturing 28th of February 2030 at SOFR MS+44 bps representing a spread of 17,5 bps over UST 4.000% due same day.
On Tuesday 4th of March 2025 KommuneKredit announced the mandate for a new 1bn 5-year USD benchmark at 14:15 CET with IPTs at SOFR MS+47 bps area.
The orderbook officially opened the following morning at 09:15 CET, with an initial spread guidance of MS+46 bps area, 1 bp lower than IPTs, and IOIs above USD 2 billion (incl. USD 75 million JLM interest).
The momentum continued, with the orderbook reaching more than USD 2.85 billion at 11:15 CET, at which point the spread was set 2bps tighter, at SOFR+44 bps.
The final orderbook closed in excess of USD 2.4 billion (incl. USD 75 million JLM), and the transaction was subsequently priced at 16.24 CET at MS+44 bps, equivalent to an annual reoffer yield of 4.224% and 17,5 bps over UST 4.000% Feb. 2030.
The final order book was highly diversified with EMEA-investors representing 54% of the allocated bonds and investors from Americas at 42%. In terms of investor type, the bulk of demand came from central banks and official institutions with a 56% allocation and banks at 38%.
This was KommuneKredit’s second syndicated transaction in 2025 of the expected EUR 5 billion long-term funding program for 2025.
STATEMENT FROM KOMMUNEKREDIT
"There is no denying that these past few days have been eventful for our Funding team. A two-day transaction during a period when volatility in certain Fixed Income markets reached levels not seen since 1990 was certainly not part of the plan. Despite this, I have seldom been prouder of our institution’s ability to earn strong recognition from investors who, in the face of such market uncertainty, provided their unwavering support. I would like to extend my sincere gratitude to investors around the world for their participation, as well as to the banks involved, whose expertise was instrumental in helping us navigate this complex process."
- Daniel Aagaard, Head of Funding & Investor Relations at KommuneKredit
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LEAD MANAGER QUOTES
“Congratulations to the KommuneKredit team for a very successful first USD outing of 2025. The strong outcome is a direct result of KommuneKredit’s global appeal as a credit, supported by a consistent, diverse and high-quality set of investors. Significant interest from Central Banks and Official Institutions supported an impressive 3bps tightening. The size and granularity of the orderbook was particularly impressive given the volatile market backdrop, which the KommuneKredit team navigated brilliantly.”
- Adrien De Naurois, Head of EMEA Debt Syndicate & SSA Origination, Bank of America
“Congratulations to the Kommunekredit team on their impressive USD 5-year benchmark issuance, marking their first entry into this tenor since May 2023. Achieving the tightest spread to US Treasuries for a 5-year RegS only transaction this year, this outstanding result underscores the global investment community's strong confidence in Kommunekredit’s creditworthiness, even amidst a volatile market environment. J.P. Morgan is proud to have partnered with Kommunekredit in bringing this benchmark to market.”
- Ioannis Rallis, Head of SSA DCM, J.P. Morgan
“Today's trade highlighted the deep support for KommuneKredit who were able to bring a strong trade to market despite the tough macro backdrop, with the book highlighting the quality and diversity of sponsorship for KommuneKredit. Morgan Stanley was delighted to be involved in the trade.”
- Robert Matthews, Executive Director, Morgan Stanley
“With this transaction, KommuneKredit have achieved yet another excellent outcome in the USD market. Despite significant broader market volatility, the new 5-year received exceptional support from high-quality accounts, allowing pricing to be tightened by 3bps vs. IPTs, landing with minimal concession. This underlines the unwavering commitment of KommuneKredit's loyal investor base globally, as well as its rarity value in the USD primary market. Many congratulations to the team!”
- James Taunton, Head of Public Sector Origination, Europe, Royal Bank of Canada
“In a market shocked by big political announcements, KommuneKredit was exactly the right name at the right time to appeal to USD SSA investors. The new 5yr was 2.5 times oversubscribed and priced close to fair value despite the huge volatility. The SG Team is very proud to have been part of this success.”
- Olivier Vion, Head of SSA DCM Origination & Syndication, Societe Generale
About KommuneKredit
KommuneKredit is Denmark’s Local Government Funding Agency. KommuneKredit was established as a membership organization under Danish law in 1899. Its voluntary membership is restricted to Danish local governments (the municipalities and regions) and currently all local governments are members, thereby representing the entire population of Denmark. Its objective as a non-profit organization is to secure cost-efficient financing for its clients.
