KommuneKredit issues its largest 10-year Euro benchmark

Based on a very solid and diverse order book, KommuneKredit priced the first Euro benchmark of the year on Wednesday 24 February 2021. At the same time, this is KommuneKredit’s largest 10-year bond and the largest Euro issuance since March 2018.

On Wednesday 24 February 2021, KommuneKredit entered the market with the first Euro benchmark of 2021, raising EUR 1bn with a strongly oversubscribed 10-year bond.

The transaction was announced to the market after midday CET on Tuesday 23 February. The books opened the following morning, and thanks to a favorable market in EUR orders accumulated to over EUR 1.8bn by 10:15 CET, thus allowing KommuneKredit to tighten the guidance. Despite the tighter guidance, books were closed at 11:30 CET with orders for more than EUR 2.6bn setting a reoffer yield of 0.044%. This translates into a re-offer price at 99.561% for the 0% coupon bond.

“The market is quite favorable at the moment, and we know we will need funding with this particular maturity later in the year and so we decided to raise it now. Thanks to the strong interest from our investors the book was quickly oversubscribed allowing us to tighten the guidance. This indicates that KommuneKredit continues to be considered a safe harbor by investors like central banks worldwide,” says Chief Funding and IR Manager Eske Hansen.

The transaction is KommuneKredit’s largest Euro issuance since March 2018 and the largest 10-year bond. It attracted investors from across the world, with an allocation of 76% to European investors. In terms of investor type, the deal was dominated by central banks and official institutions who accounted for 49%.