Rating: Aa1/AA/AA
Amount: €3bn Reg S only
Maturity: 20 January, 2050
Issue/reoffer price: 98.502
Coupon: 0.7%
Spread at reoffer: mid-swaps plus 13bp; 40.5bp over the August 2050 Bund
Launched: Monday, January 13
Payment date: January 20
Joint books: Goldman Sachs, JP Morgan, UniCredit
Borrower’s comment:
Our funding and communication strategy gives us the flexibility to do an intraday execution in crowded weeks to deal with a high concentration of supply in the primary market.
We decided to go for a 30 year to offer investors something different from the other deals, where there has been a focus on the five to 10 year part of the curve.
This is our biggest ever order book for this maturity by size and number of accounts. It was a well-diversified and granular book.
We think the new issue premium was around 1bp. The bond has performed in the secondary market. It is trading at around mid-swap plus 11bp/12bp.
Bookrunners’ comment:
We started at mid-swaps plus 15bp and ended at plus 13bp. The final book was over €12bn. We thought that there would be a lot of demand in that part of the curve as it has been undersupplied
Geographical distribution
Euro area 49%
UK/Switzerland 39%
Other 12%
Distribution by investor type
Fund managers 48%
Pension/insurance funds 24%
Other 28%
Market appraisal:
“…I was quite impressed to see a book of over €12bn for a 30 year. From my calculation, they ended up with either a 1bp new issue premium or nothing.”
“…we expected it to be a huge success. The new issue premium is quite narrow. A great job.”
