Swedish pension company Skandia has invested SEK 500m in a bond issued by Svensk Exportkredit that is tied to the new reference rate Swedish krona Short Term Rate (Swestr).

Swestr is a transaction-based reference rate that the Riksbank calculates based on deals 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 SEK 500m investment, Skandia said that new steps were taken in the transaction to transaction-based reference interest rates.

Skandia acted as individual financier in the transaction, while Svensk Exportkredit acted as issuer of the bond, and Dankse Bank acted as the advisory institute and organiser.

“Skandia is very pleased to have the opportunity to invest in this bond,” said Skandia asset management head, Lars-Göran Orrevall.

“As a long-term investor, we want to promote the development of Swestr as we appreciate the transparency associated with the reference rate.”

The coupon on the bond is based on a cumulative average interest rate with quarterly payment and a maturity date of 13 January 2025.

Svensk Exportkredit head of treasury, 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.”

Dankse Bank head of Swedish fixed income operations, Joakim Anjou, added that the bank was proud to act as sole adviser and organiser of the first bond linked to the new reference rate.

“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,” he concluded.

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