LONDON (MNI) – Netherlands priced $3.275 billion of its new 5-year
dollar bond at a cut-off spread of mid-swaps +9 basis points and
bid-to-cover ratio of 1.6 times, said the Dutch State Treasury Agency
(DSTA).
The DSTA opened the order book for its inaugural 5-year dollar bond
earlier Thursday at a spread guidance of mid-swaps +9 basis points to
+12 basis points. This spread guidance then tightened to MS +9-/+10bps
after the order books approached $4.5 billion, according the debt
agency.
The size was much larger than expected as the debt agency was
looking to target $2.0 billion size for its new five-year bond via Dutch
Direct Auction (DDA).
This dollar-denominated issue has been on the DSTA’s agenda since
2010 in order to broaden and diversify the Dutch state’s investor base.
But the Treasury had held off on launching such a bond because of the
lack of an adequate arbitrage window.
Peter Nijsse, head of issuance at the DSTA, had previously told
Market News International that the dollar bond would be launched only if
it were cost-beneficial, which would depend on a combination of where
the basis swap and euro funding levels were.
In the past, the debt agency has issued only commercial paper
denominated in US dollars.
The debt agency in its 2012 outlook said that if and when dollar
bonds were issued, they would reduce the DSTA’s call on the money market
by a corresponding amount.
The DSTA said Barclays, Citibank, Deutsche Bank, HSBC, Jefferies,
Natixis, Rabobank and RBS have been selected as primary dealers and
Deutsche Bank, HSBC and RBS have been appointed as primary advisors for
the dollar bond.
The Netherlands’ borrowing requirement is estimated at E101.5
billion in 2012 and is expected to be funded by some E60 billion of
issuance in the capital markets, via DSL bonds, with the rest coming via
the money market.
— London newsroom: 00 44 20 7862 7494; email: nshamim@marketnews.co
[TOPICS: MMXBO$,MNXAU$,MFX$$$,MGX$$$,M$X$$$,MT$$$$]
