Rating: Aa3/AA-
Amount: Nkr500m
Maturity: May 28, 2008
Issue price: 101.09
Fixed re-offer price: 99.49
Coupon: 5%
Launched: Thursday May 8
Lead mgr: Deutsche Bank
Bookrunner's comment:
Issuance has tailed off over the last couple of months to match the fall-off in demand but there is still retail and institutional interest and we needed inventory on our book to satisfy that appetite.
Buying from Benelux investors is particularly slow but we are still getting decent orders from German speaking areas and from Switzerland and Italy.
Having a 5% coupon is crucial for retail investors and we have achieved that with this transaction.
The issue syndicated well and a couple of managers came in and asked for extra bonds, which bodes well for the placement.
Market appraisal:
"...Deutsche has a big placement capability and a large network and although part of the reason for launching at this time could be the competition between Fortis and Deutsche in the league tables, I have no doubt that Deutsche have demand for the deal. Deutsche also has the advantage of institutional demand to absorb larger deal sizes.
On the whole though, dealflow in kroner is slowing down and, if the coupons go below 5%, I suspect it will die away completely."
"...as our customers are focused on investing in euros, there is very little demand for Norwegian kroner or for any of the non-core dollar currencies for that matter. Rates are just too low.
In the circumstances I am a bit surprised to see two deals in a week. But Deutsche has an institutional buyer base to help accommodate its issue. A lot of those who are invested in Norwegian kroner will stay in it because they have had such a good run over the last two or three years even though they have lost some of the currency value in the last couple of months."
