UPDATE 2-Sweden raises $3 bln in Nordea stake sale

Wed Jun 19, 2013 8:13am EDT

Related Topics

* Sweden sells 260 mln ordinary shares for 75 crowns each

* Size of sale equal to 6.4 percent of outstanding shares

* Debt office says bond auction volumes unchanged after sale (Adds government comments)

By Mia Shanley and Johan Ahlander

STOCKHOLM, June 19 (Reuters) - Sweden has sold nearly half its remaining stake in Nordea, the region's biggest bank, raising $3.0 billion which will be used to pay down debt as the centre-right government heads into an election next year.

Sweden sold 260 million Nordea shares, raised from an original goal set on Tuesday of 230 million, citing strong investor demand and taking its holding down to 7.0 percent from 13.4 percent.

The stake went at 75 crowns per share, a 4.8 percent discount to Tuesday's close, with Nordic investors snapping up 25 percent of the shares and the rest going overseas.

Financial Markets Minister Peter Norman said the government would stick to plans to sell the rest of its Nordea stake, a legacy of a 1990s banking crisis, without specifying when it could do so.

"Our role should be clear. We should be on the banks' backs, we should be tough regulators," he said at a news conference on Wednesday.

The coalition government had sped up privatisation during its first term, when it had a clear majority in parliament, but had to back off when the 2009 financial crisis pushed down asset prices.

Sweden will use proceeds from the sale to pay down national debt, already one of the lowest in Europe at about 30 percent of economic output.

But the sale also boosts the government's fiscal confidence as next year's election approaches, and with the coalition behind in the polls, some commentators expect the government to roll out a new tax cut, or other expansionary measures.

"If we can vaccinate the Swedish economy and make it safer by having even lower state debt, then we have protection against future crises," Norman said of the debt reduction plans.

Government bond auction volumes will remain unchanged after the sale, the debt office said, though foreign currency borrowing will decrease.

Nordea shares were down roughly 4 percent on Wednesday compared with marginal dips on the broader Stockholm bourse and the EuroStoxx 600 Bank index.

LONDON EYES

Sweden's move will have been closely watched in London, where Britain's finance minister, George Osborne, is expected to start the clock ticking for the sale of its big stakes in Lloyds and Royal Bank of Scotland later on Wednesday.

He is expected to say he wants to sell part of the government's 39 percent stake in Lloyds this year or next, following the climb in bank share prices.

The Swedish government last sold a 6.3 percent stake in Nordea in February 2011 at 74.5 crowns, a 5 percent discount to the share price at the time.

"We have had a stabilisation of the market... and reduced concerns in the bank sector," said Erik Thedeen, state secretary at the finance ministry, explaining the timing of the new sale.

Nordea's share price has risen 16 percent so far this year.

A bigger stake sale would have also meant a bigger discount, Thedeen said.

The Swedish government is Nordea's second-biggest owner behind Finnish insurance and investment group Sampo, which owns around a fifth of Nordea.

Sampo has said it would be interested in buying a small amount of any shares on sale, but does not want to raise its stake beyond 25 percent. Sampo had no comment on Wednesday.

The sale was carried out via accelerated book building by Morgan Stanley as global coordinator and joint bookrunner, with Credit Suisse and SEB as joint bookrunners. (Reporting by Mia Shanley, Patrick Lannin, Johan Ahlander, additional reporting by Ritsuko Ando in Helsinki and Steve Slater in London; editing by James Jukwey/Ruth Pitchford)

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