KommuneKredit issues new 5bn DKK long 3-year benchmark

On Tuesday 7th of May, KommuneKredit priced a new DKK 5 billion long 3-year transaction at DKK MS-31bps. The transaction marks the beginning in establishing a liquid product in the shorter end of the DKK market and it is KommuneKredit’s intention to be a reoccurring, annual issuer in this format.

On Monday 29th of April KommuneKredit published a mandate announcement for a new long 3-year DKK Benchmark and stated the intention to establish a new liquid DKK curve in the Danish market. Following the announcement, KommuneKredit engaged in numerous investor meetings with both domestic and international investors.

The transaction attracted interest from the onset and by the time of book opening at 09.00 CET on the morning of Tuesday 7^th of May, indications of interest were in excess of DKK 5.5bn. Guidance was announced at DKK MS-30bps area.

The orderbook grew to exceed DKK 7.3bn (including 1.5bn JLM interest) during the first hour of opening, allowing for final terms to be sent out at 10.30 with the spread set at DKK MS-31bps and issue size of DKK 5bn. Books were subject to close at 11.00 CET leaving time for investors to come in with final orders.

At 11.00 CET, the orderbook closed in excess of DKK 9bn (including 1.75bn JLM interest) from close to 30 individual accounts.

In terms of geographical distribution, all investors came from the EMEA region with the majority being domestic, adding two UK and one Nordic investor. Asset Managers accounted for the largest share of 46% followed by strong support by Banks & Bank Treasuries at 32%, Central Banks & Official institutions at 13% and Fund Managers /Pension Funds at 9%.

STATEMENT FROM KOMMUNEKREDIT

“ It has been our strong belief, that KommuneKredit could add value to the Danish fixed income marked by offering an additional liquid 0%-RW AAA-rated curve of bonds out to 5 years. Last week we released the first leg of this strategy, and we are delighted to experience, that the Danish investor community has welcomed this new investment opportunity.”

The Funding Team: Daniel Aagaard, Head of Funding & IR; Louise Gregersen, Senior Funding & IR Manager; and Louise Rosentoft, Senior Funding & IR Manager

LEAD MANAGER QUOTES

“ We congratulate KommuneKredit on their very successful transaction in DKK. It is a good testament to the need for more regular issuance from KommuneKredit in DKK and to build a curve in DKK. Today’s transaction marks the first step of this journey.”

Bo Søndergaard - Head of SSA Danske Bank

” We want to congratulate KommuneKredit on the very successful result for its first step to establish a liquid DKK Benchmark curve. The transaction was well received by the investors, attracting high quality demand, and allowing the issuer to tighten the spread by 1bp from the guidance is a true testament of the continuous robust investor support for this name.“

Kamal Grossard-Amin – Head of SSA DCM at Nordea

“ nvestors clearly bought into KommuneKredit’s vision of creating a liquid 0% RW curve in DKK - outside the Danish Govie space, as could be seen by the overwhelming reception for today’s transaction which represents the first step on this journey. Nykredit is proud of having been entrusted with the role of Joint Lead Manager on the way to fulfilling this vision.”

Henrik Asmussen – Head of MTN-Origination & Syndicate at Nykredit Markets

“ Very exciting to see the reception KommuneKredit is receiving from their home market after their announcement in regard to a more strategic presence in the DKK market. The investors really engaged, and this outcome gives us great comfort in more to come for the future.”

Anna Sjulander, Head of Public Sector and SSA Origination at SEB