Norway’s SpareBank may buy back up to NOK 200 million of perpetuals

By Susanna Moon

Chicago, Aug. 20 – SpareBank 1 SMN said it may repurchase up to NOK 200 million of its NOK 450 million of additional tier 1 perpetual hybrid bonds from its MING68 issue with a coupon of 4.55%.

The redemption would be funded using proceeds of perpetual additional tier 1 bonds, according to a company announcement on Monday.

If the tier 1 add-on is issued, SpareBank will consider buying back a corresponding amount of the MING68 notes, the company had said.

The company had mandated DNB Markets and SpareBank 1 Markets to look at the possibility of issuing subordinated tier 2 bonds along with the additional tier 1 perpetuals.

SpareBank said later in the day that it had issued an upsized NOK 500 million of 10-year subordinated tier 2 bonds with settlement on Sept. 4. The issue was increased from NOK 400 million due to a substantial oversubscription, the release noted.

Interest on the tier 2 bonds was Nibor plus 145 basis points.

The bond issue as well as the repurchase were approved by the Norwegian FSA and the bank’s supervisory board, the earlier release noted.

SpareBank is a Trondelag, Norway-based savings bank that is part of the SpareBank 1 group.

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