Belgium’s KBC issued its inaugural covered bonds to strong investor appetite that saw orders for the €1.5 billion ($1.9 billion) deal swell to €6 billion.
The deal is the second to be issued under covered bond legislation introduced in July 2012. It follows a €1.25 billion, five-year covered bond issued by Belfius, which priced at mid-swaps plus 45 bps in late November. KBC priced its deal this week at mid swaps of 30 bps, resulting in an issue price of 99.638%, the bank said in a statement.
Lead managers on the deal were Deutsche Bank, DZ Bank, Goldman Sachs, KBC and Natixis.
The covered bonds market provides KBC with the opportunity to further diversify its investor base and long-term funding mix and resources, the bank said.
In terms of the distribution, German & Austrian accounts took 43%, the Benelux region20%, Nordics 12%, France 11%, UK 8%, Switzerland 3%, Southern Europe 1% and others 2%. In terms of different types of investors, banks took up 48%, followed by asset managers 36%, central banks 3%, insurance 3%, pension fund 4% and others 6%.