October 11, 2017 / 12:11 PM / a year ago

Asfinag, SFIL ride in EFSF's slipstream

LONDON, Oct 11 (IFR) - A strong showing for European Financial Stability Facility’s €3bn six-year on Tuesday, which was nearly three times subscribed, paved the way for a €750m seven-year deal from Asfinag and SFIL’s €1bn five-year.

Asfinag, which enjoys a guarantee from the Republic of Austria, is a rare name in the market, having last issued in September 2015 through a dual-tranche offering, which raised €1.5bn in total.

Its rarity value, which helped spur an oversubscribed book, was expected to lead to tight pricing, according to a banker away from the deal.

Deutsche Bank, Erste Group, Morgan Stanley and Societe Generale priced it at 17bp through mid-swaps, some 3bp tighter than the less 14bp area IPTs, giving a 0.25% coupon. Books were in excess of €2.5bn (ex-JLM).

“The spread going out carries very little concession to where OekB is trading in secondary markets,” the banker said.

“It’s in the high teens against Austrian govvies, and then you take it down as much as you can during bookbuilding.”

Oesterreichische Kontrollbank’s September 2024s were trading at 14.5bp through mid-swaps.

Leads Barclays, Commerzbank, Credit Agricole, Natixis and UniCredit set guidance at OAT 21bp area for SFIL’s €1bn five-year trade. Books were in excess of €1bn (ex-JLM).

The French local government and export agency’s yearly issuance is between €5bn and €7bn, with more than €50bn outstanding, according to a September presentation.

SFIL and Asfinag’s deals follow the launch of EFSF’s heavily oversubscribed issue, which had €8.8bn of orders.

“Rapid growth in the order book enabled the EFSF to close the books after around an hour. Very strong investor interest for this new bond allowed us to price it without a premium,” said Siegfried Ruhl, EFSF head of funding and investor relations.

The spread of the €3bn 0.125% Oct 2023 issue was fixed at mid-swaps minus 25bp, implying a reoffer yield of 0.135%. Barclays, BNP Paribas and Goldman Sachs were joint lead managers. (Reporting by Melissa Song Loong; Editing by Helene Durand, Sudip Roy)

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