ING Groep N.V. set the size of its benchmark-sized euro green Tier 2 today at EUR 1bn after seeing strong investor demand. Pricing was fixed at 250bp over mid-swaps, in from initial price thoughts of MS+275bp area. By the time the order book for the 11-year trade callable at six years closed, demand was above EUR 3bn, according to Bond Radar (www.bondradar.com).

Scope’s rating on ING Groep is based on the group’s strong universal banking franchise in Benelux and growth momentum in neighbouring countries. “ING is one of the few large international banking groups with a true pan-European approach, recently adjusted to focus on growth. In addition, the bank has a well-articulated digital and sustainability strategy, as well as efficiently managed prudential metrics,” said Nicolas Hardy, lead analyst for ING.

Swedbank AB attracted EUR 3.3bn in final orders for its EUR 750m Tier 2 on Tuesday. The 10-year with a call at five years went at a spread of 215bp over mid-swaps, the tight end of MS+215bp-220bp guidance. Initial price thoughts had been MS+245bp.

Swedbank’s rating is anchored by a resilient retail and commercial banking business model in Sweden, complemented by some geographic diversification in the Baltic region. “The ratings benefit from the group’s very strong profitability and asset-quality metrics. Swedbank is also embracing changes in digital transition, an element of our long-term sustainability (ESG-D) assessment, although progress so far is insufficient to provide an uplift to the rating anchor. The rating also benefits from high buffers to capital requirements,” said Marco Troiano, lead analyst for Swedbank and Scope’s head of financial institutions ratings

Svenska Handelsbanken’s sterling Tier 2 on Monday ended up four times oversubscribed at the final spread of 280bp over Gilts. Initial price thoughts for the 10-year issue with a call at five years had been 305bp area over Gilts. Within two hours of launch, the book had grown to GBP 1bn and by the time the size was set at GBP 500m, demand had reached GBP 1.8bn, enabling pricing to tighten to the final spread. The book closed above GBP 2bn.

“Svenska Handelsbanken has a strong franchise in retail and commercial banking in Sweden, complemented by moderate international diversification that helps to protect against potential domestic asset quality shocks,” Troiano said. “The bank’s business model has a record of delivering revenue and profit growth with very limited volatility.”

Troiano added that the bank is strategically focusing on future-proofing against rapidly changing customer preferences and investing in digital capabilities. “Given its long-standing commitment to a proximity-centred banking model, we believe this process carries some risk of disrupting its customer franchise,” he said. Active management of its environmental footprint and the development of a broad range of green products are also part of Handelsbanken’s efforts to improve its long-term sustainability.

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To view Scope’s rating and rating report on Swedbank, or to register, please click here.

To view Scope’s rating and rating report on ING, or to register, please click here.

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