(Adds final terms)
By John Geddie
LONDON, March 21 (IFR) - Triple-A rated Sweden is on track to add a further USD1bn to its foreign currency holdings, when it prices a new RegS/144a three-year benchmark on Thursday.
Barclays, Deutsche Bank and HSBC have set final terms on the deal at mid-swaps minus 6bp area, an aggressive level aimed at taking advantage of an investor flight to quality with eurozone markets still shaken from Cyprus’ controversial bailout proposals.
A straight line interpolation of Sweden’s existing bonds placed fair value on the new March 2016 maturity at around mid-swaps minus 4bp, according to Tradeweb data at 0920GMT.
One bank managing the deal said the allocation process was proving tricky, with final orders well in excess of USD1bn from a number of very high quality accounts.
The deal marks the country’s third international bond in quick succession, after Sweden’s debt office was ordered by the central bank to raise an extra SEK100bn (USD15.4bn) in foreign currency reserves in 2013.
Non-eurozone country Sweden was last in the public market in late February when it issued a USD3bn 1% February 2018 bond, the longest point on its dollar curve.
Barclays, Citi, Credit Suisse and Goldman Sachs priced that 1.0% five-year issue flat to mid-swaps, equivalent to Treasuries plus 16.1bp.
Earlier in January, Sweden also issued a EUR4bn five-year bond. (Reporting by Josie Cox and John Geddie, editing by Julian Baker)