UPDATE 3-Finland set to issue new EUR4bn 10-year bond

Tue Jan 28, 2014 6:34am EST

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(Adds final spread)

By John Geddie

LONDON, Jan 28 (IFR) - The Republic of Finland is set to price a new EUR4bn 10-year benchmark bond later on Tuesday after collecting over EUR8.5bn of orders, according to a market source.

The Aaa/AAA/AAA rated borrower has set the final spread at mid-swaps plus 5bp on the new April 2024 deal.

Finland initially marketed the bonds at price thoughts of high single digits, before setting guidance at plus 7bp area after orders topped EUR5bn, and then refining that to plus 5bp-7bp when books had reached over EUR8.5bn.

Finland last issued a euro bond via syndication back in August last year, a EUR4bn 1.125% five-year issue.

Its last 10-year was further back in April, a EUR4bn 1.5% April 2023 bond that priced at mid-swaps minus 2bp. That issue is currently quoted at swaps plus 2bp, according to Reuters data.

An interpolation of that bond and Finland's 4% July 2025s places fair value at around mid-swaps plus 4.5bp, indicating a very slim new issue premium.

Barclays, Bank of America Merrill Lynch, Danske Bank, HSBC and Nordea Markets will price the deal later on Tuesday. (Reporting by John Geddie; editing by Julian Baker)