Skandia invests SEK 500m in first bond under new Swestr reference rate

Written by Michael Griffiths

04/01/2023

Skandia has invested SEK 500m in a bond issued by Svensk Exportkredit.

The bond is tied to the new reference rate, Swedish krona Short Term Rate, (Swestr) – a transaction-based reference rate that the Riksbank calculates based on transactions carried out on the Swedish money market. The loan has a two-year term and is the first Swestr bond on the market.

Through the investment, life insurer Skandia said that “new steps” are being taken in the transition to transaction-based reference interest rates.

As part of the transaction, Skandia is acting as individual financier, Svensk Exportkredit as issuer of the bond, while Danske Bank acts as advisory institute and organiser.

“Skandia is very pleased to have the opportunity to invest in this bond,” head of Skandia's asset management, Lars-Göran Orrevall, said. “As a long-term investor, we want to promote the development of Swestr as we appreciate the transparency associated with the reference rate.”

The transaction has promoted the development of the market for the transaction-based reference rate, Swestr, and head of treasury at Svensk Exportkredit, Anna Finnskog, commented: “Svensk Exportkredit has experience in issuing bonds tied to transaction-based reference interest rates in other currencies.

“As we were one of the first to issue SOFR bonds, it was natural for us to participate and contribute to the same development also in the Swedish market, by issuing this first Swestr bond. We also want to respond to investors' wishes and needs when they arise.”

Head of Danske Bank’s Swedish fixed income operations, Joakim Anjou, added: “Danske Bank is proud to act as sole advisor and organiser of the first bond linked to the new reference rate Swestr.

“As the leading player in the Swedish fixed income market, we are keen to participate in developing the market with new and more efficient tools for investors and borrowers.”

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