Maturity: January 15, 2007
Issue price: 101.316
Fixed re-offer price: 99.841
Spread at re-offer: mid-swaps flat
Launched: Friday January 9
Joint books: Danske Bank, UBS
Danske Bank — The borrower is a familiar name in the Swedish krona market and is always well received.
This deal may look expensive vis-à-vis GECC’s most recent SEK issue due 11/06, but in general spreads have come in since last year so it is fair value in the context of today’s market.
Flat to mid-swaps for a three year maturity was very competitive, and we were happy with the deal. This was proven in the good following GECC had for the transaction.
We welcomed the opportunity to jointly lead this issue with UBS. Pairing up ensured success and allowed us to access a broader investor base, which maximised our placement capability.
The syndicate group was strong and included some Swiss banks representing the strong investor appetite seen from this area. Bonds will not be printed with definitives though, meaning that the traditional retail audience will not be as strong as it could have been.
The deal was launched at the end of the week after weaker US figures were announced and the ensuing rally in the bond market. There had been a lot of supply to the new issue markets, but all in all the deal has had a good start.
We have seen good buying interest throughout Europe for the bonds.
UBS — We had sold all bonds by day two and were happy with how the deal went. The market likes GECC as a name and its success with this transaction was down to a combination of things.
There are not many liquid issues in Swedish kronor at the moment and we found there was strong demand for an issue like this.
We teamed up with Danske Bank because we enjoy working with them and also because it helped access a wider investor base. We have a good relationship with them and our joint effort ensured a smooth deal.
GECC is a widely recognised name and is a well rated and popular corporate. The banking group that participated in the transaction is strong and doing its utmost to place bonds with their clients. It was more or less the same group we have for BNG deals.
Demand came out of Switzerland, Germany and the Benelux/Scandinavian region from a mixture of retail and institutional investors — so nothing surprising on that front.
Spreads have come in since last year for Swedish krona deals so there are no relevant comparables, but this issue is trading in line with the market.
Testament to this is the good reception we received.