Nederlandse Waterschapsbank (NWB Bank), a Dutch Aaa rated financial services provider for the public sector, has issued its first euro denominated benchmark of 2018. The 10-year €1.25bn fixed rate notes were priced at MS-8bps with Barclays, Commerzbank, Natixis and NatWest Markets acting as joint bookrunners.
The notes, which are listed on the Luxembourg Stock Exchange, were issued under the NWB Bank's €60bn debt issuance program and will be repaid in full on March 1, 2028. The coupon is set at 1%, payable annually, and the re-offer price is 99.547%.
The deal has been well received and quickly firmed up over €500m of interest, according to Bouke den Hoed (pictured), deputy head of treasury, NWB Bank. "After two hours books were over €1bn and official guidance was then set at MS - 7 bps area. The order book continued to grow and got over €1,5bn when spread was set at MS - 8 bps. Book closed at 1pm CET, with over 60 investors involved. Given the strong momentum on the trade, the size was then fixed at €1.25bn," said Den Hoed.
The strong success of the transaction demonstrates the current appetite of investors for the 10-year + part of the curve, according to Den Hoed. "We have witnessed strong participation of Banks treasuries and Asset Managers attracted by the nice relative Value versus European Govies," he said, adding that "roughly" half of the firm's annual funding is raised through this type of benchmarks.
"We also issue structured notes, such as callables, but never in public format like this euro-benchmark. [Our structured notes] are always private placements, in smaller volumes and denominated in various currencies, and they are always done on the initiative (reverse inquiry) of the investor," said Den Hoed.
The notes are not intended to be made available to retail investors in the European Economic Area and consequently, no Key Information Document (Kid) required by the packaged retail and insurance-based investment products (Priips) regulation has been prepared.
Distribution by geography was balanced with German and Austrian accounts taking the lead with 31%, followed by France (18%), Other Europe (16%), Benelux (13%), UK (12%), Asia (6%), Nordics (3%) and Middle East (1%). Banks took the main share of the allocation with 51%, closely followed by asset managers (32%). Central banks & public institutions took 12% while the remaining 4% went to insurance companies and pension funds
Tranches of the notes are solely sold by the issuer and dealers in bearer form outside the US, to non US persons in reliance on Regulation S (regulation which provides an exclusion from the Section 5 registration requirements of the Securities Act of 1933, for offerings made outside the United States by both US and foreign issuers), from Banque Internationale à Luxembourg.
NWB Bank is a national promotional bank with the principal aim to provide financing to the Dutch public sector. The bank services decentralised government bodies (Water Authorities, municipalities and provinces) as well as entities that are guaranteed by the (decentralised) government.
Click the link to view the final terms of the issue.
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