After the release of its excellent 2015 results and in a moment of good market sentiment, Argenta Spaarbank nv (“Argenta”) launched today its first subordinated benchmark issue. This Tier 2 transaction was highly successful. The EUR 500 million notes, with a maturity of 10 years and a call option at 5 years, bear an annual coupon of 3.875%. This issue was priced at the tight end of the spread guidance at a re-offer spread over euro mid swaps of 395 basis points.
This transaction enables Argenta to contribute to the expected regulatory bail-in requirements (MREL) and strengthen the quality of its A- rating by Standard & Poor’s. In addition, it further increases Argenta’s total capital ratio and introduces a funding diversification in addition to its strong retail funding model.
In a constructive market environment, the book building was fast and solid, demonstrating the interest of the investors for Argenta’s strong credit. The well diversified final book was in excess of EUR 800 million from over 60 good quality accounts.
Joint bookrunners were BNP Paribas and HSBC. Rotschild was Argenta’s advisor.
The transaction has a nice geographical distribution with the bulk of the allocation in the UK (39%), closely followed by Benelux investors (36%). French investors represent 21%, Italy 2%, Germany/Switzerland 1% and others 1%.
Asset managers were the largest investor class in this subordinated issue with a participation of 74%. Insurance and Pension Funds represent 16%, followed by banks and private banks (9%) and others (1%).