UPDATE 2-Investors rush for Belgium's new 10-year bond
(Adds final pricing details, orders)
By John Geddie
LONDON, Jan 14 (IFR) - Investors rushed to place orders for Belgium's new syndicated bond offering on Tuesday, allowing it to print a chunky new EUR5bn 10-year benchmark.
Belgium issued a new OLO 72, which matures on June 22 2014, at mid-swaps plus 49bp, with final orders over EUR10.8bn, said a banker managing the deal.
The bond was initially marketed to investors at mid-swaps plus low 50s, but formal guidance was later refined to 50bp area after interest topped EUR7bn.
The positive momentum created from the syndication also saw Belgium's other bonds rally in the secondary market.
Its current 10-year bond, the OLO 68, maturing in June 2023, is 2.5bp tighter on the day, bid at a yield of 2.45%.
Lead managers - BNP Paribas Fortis, Citigroup, Credit Agricole CIB and JP Morgan - spotted fair value for the new issue at around mid-swaps plus 45bp just before the deal priced, based on Belgium's secondary market, indicating a 4bp concession for investors.
The bonds offered an 82.3bp pick-up to Germany's equivalent 2% August 2023 Bund, and a 16.7bp pick-up over France's 2.25% May 2024 note.
Some investors swapped out of French paper to buy the new Belgian bond, said a banker managing the deal.
The last time Belgium attracted an order book of over EUR10bn for a new syndicated issue was back in 2011, when it launched a new EUR5bn 3.5% June 2017.
It received more than EUR7bn orders when it launched its previous 10-year bond in January last year, allowing it to print a EUR4bn 2.25% June 2023 bond.
It was able to issue a larger EUR5bn new bond last year, however, after receiving over EUR8.5bn orders for a five-year issue in February.
Belgium expects to issue just EUR30bn of OLOs this year, a significant reduction on the EUR42.33bn it issued in 2013 and the lowest volume since 2007.
The sovereign is plotting just one other syndicated bond issue in 2014, possibly in a 15 to 20-year maturity, a source close to the discussions told IFR in December. [ID: nIFR9qqhTF]
The country's auction scheduled for January 20 has been cancelled. (Reporting by John Geddie; editing by Alex Chambers, Helene Durand)
- Malaysia military source says missing jet veered to west |
- Ukraine appeals to West as Crimea turns to Russia |
- Malaysia air probe finds scant evidence of attack: sources |
- UPDATE 1-Missing Malaysian plane last seen at Strait of Malacca-source
- CIA accused of spying on U.S. Senate intelligence committee