Rating: A2/A/A+
Amount: Eu700m
Maturity: 17 June 2013
Issue/re-offer price: 100.00
Coupon: three month Euribor plus 33bp
Spread at re-offer: three month Euribor plus 33bp
Launch date: Wednesday 24 May
Payment date: 1 June
Joint books: HSBC, Merrill Lynch, UBS
Bookrunners' comments:
HSBC — This is the first euro denominated deal SLM has done through HSBC, and it was great to be involved. We went to the market with the intention of doing a benchmark trade at the low 30s over swaps, and after getting enough to print a Eu700m bond, with the help of lead orders, we were able to price at 33bp over.
Comparables are difficult, but the seven year dollar CDS was trading qt 25/28.
The UK took 48%, with 27% going to northern Europe, offshore accounts bought 16% and buyers in southern Europe accounted for 7%.
Banks and asset managers were the major buyers of bonds.
Merrill Lynch — Considering the volatility in the market, this is a very good transaction.
SLM Corp has a strategy of pricing flat to the outstanding euro and dollar curves, and because of that this deal was priced very aggressively. Most of the market expected to see the issue at 35bp over, and had we gone to that point of the curve, we could have tapped into twice the liquidity we did.
But, we got 30 accounts to buy into the trade — seven years was the sweet spot as far as liquidity is concerned.
UBS — This was a great deal in what has been quite a jittery market. The issuer has become very well known among investors by virtue of all the work it has done in the past few years, but it is pretty difficult for them as there are very few comparisons.
In the past they have brought deals and in doing so have had to go out on the road and do lots of marketing. Now, much like borrowers such as GE, they are able to put a trade on the screens and get it done.
The trade was backed by orders totalling in triple digit figures from investors in the UK, the Netherlands and Germany.
We announced a trade of at least Eu500m at low 30bp over Euribor, and with a book of over Eu800m, we managed to price at 33bp over and it is now bid at that level.
