Rating: A3/A- (Moody's/Fitch)
Maturity: 7 February 2008
Issue/re-offer price: 99.941
Coupon: three month Euribor plus 15bp
Spread at re-offer:
Launched: Thursday 13 January
Payment date: 7 February
Joint books: BNP Paribas, Danske Bank
BNPP ? Irish Nationwide's deal was priced as much as 3bp tighter than it would have been had we done it in December. There is enormous demand out there, and it should last for a week or so more before it starts to slow down, and issuers will be coming in to take advantage.
We called Irish Nationwide on the back of the Britannia Building Society deal. The momentum in the book was strong and we were pleased to close with an order book of just short of Eu1bn.
We priced a Eu750m deal. Having gone out with price talk in the high teens over Euribor, the level of subscription meant that we were able to get a deal together at 17bp over.
The borrower has a 2006 deal, which was bid at around 12bp over when we announced this and is now (Thursday) bid at 10.5bp-11bp. There is also a sterling deal that we did for it last year, which has probably lagged a bit, because it was not very large and lacks the liquidity, but that was at 20bp/18bp over Libor.
If we had tried to bring this deal at the end of last year we would have had to have 20bp in the initial guidance. As it was, we had 55 investors in the book, in 15 different geographical locations.
Performance in the primary market is so strong at the moment that it reprices the secondary market. We have seen secondary spreads tightening when a borrower announces a deal. And all these deals ? for the time being ? are strategic and priced to clear.
Danske ? We priced it at a re-offer spread of 17bp with a coupon of 15bp. Bonds were being sold at 17bp. We did a five year for Irish Nationwide last year after a European roadshow. At the time the market was looking for five year paper, so we did Eu750m off the back of Eu2bn in demand.
We felt that accounts were still up to date and that Irish Nationwide would still be welcomed in the market.
We knew there was demand unfulfilled from the last time.
We went out yesterday (Wednesday) morning with price talk for a three year in the high teens and we indicated that the size would be a benchmark.
The book grew well during the day and reached Eu700m by the close yesterday. We were certain that the demand was there, so we set the spread as 17bp and left the books open until this morning.
There was one indication of interest at 19bp over and the rest were at 18bp. We were successful at bringing most of those investors in from 18bp over to 17bp and we also had fresh orders that came in at 17bp this (Thursday) morning. We ended up with a book of Eu925m, Eu850m of which was good at 17bp.
We were pleased with the breakdown, which included many of the usual buy and hold investors in FRNs. Germany, the UK and Ireland were the top countries, Scandinavia took almost 14%, the UK 20% and Ireland 19%. France came in with a good 10%.
France was missing from the last deal because the five year maturity is a bit long for French buyers, but three years is much better for money market funds. We were pleased with the reaction to the transaction.
The borrower is well liked and it has plenty of lines of credit open for it, which is proof that it pays to hold a roadshow, not just for the first transaction, but also for subsequent ones.