03/14/2019 - 18:51

MuniFin’s USD 1bn benchmark three times oversubscribed within one hour

On Wednesday 13 March 2019, MuniFin successfully priced a new USD 1 billion 5-year benchmark bond, the year’s first USD benchmark outing for the company. The orderbook grew to a new record for a MuniFin USD benchmark.

Books opened on Wednesday morning at 8.00am GMT with guidance of MS +15 bps area after first collecting indications of interest at +16 bps area overnight.  The books were closed shortly at 9.00am GMT, the strong demand allowing MuniFin to fix the spread at MS +14 basis points. Final orders were in excess of USD 3 billion. This represents the largest-ever orderbook for a MuniFin USD benchmark.

– We are delighted with the outcome of the trade. The USD is one of MuniFin’s strategic benchmark markets and we’re pleased to have seen such a strong reception for this trade from our long-standing investor base. This was one of the fastest book-building processes for a USD transaction that I can remember and the USD 3bn+ of orders represent the largest-ever orderbook for a MuniFin USD deal, says Joakim Holmström, the Head of Capital Markets at MuniFin.

More than 45 investors participated in this transaction with particularly strong demand from central banks, official institutions and bank treasuries. Geographically, half of the demand originated from the EMEA region.

Keys to success: strong name recognition and swift reaction to a favourable market backdrop

The lead managers of the transaction were Bank of America Merrill Lynch, BMO, Nomura and Scotiabank.

– This is an outstanding result for MuniFin’s first USD benchmark of the year. A three times oversubscribed book and pricing through their curve is testament to MuniFin’s strong name recognition in the USD market, comments Managing Director Massimo Antonelli of BMO Capital Markets.

– Municipality Finance delivered a textbook USD benchmark transaction by moving swiftly in reaction to a favourable market backdrop. The outsized orderbook reflected a broad appeal of the name to a wide variety of investors; this in turn allowed Municipality Finance to price extremely tight versus its curve and its peers, says Cesare Roselli, Managing Director of Scotiabank.

Issue size: USD 1 bn
Settlement date: 20 March 2019
Maturity date: 15 November 2023
Re-offer spread: MS +14bps / CT5 +20.2bps
Coupon: 2.500%
Re-offer: 99.471% / 2.622% s.a.