Severn Trent targets sterling redemption flows

(Fixes dateline)

By Pauline Renaud

LONDON, Nov 27 (IFR) - Water utility Severn Trent (Other OTC: STRNY - news) is taking advantage of redemptions in the currency due next month and is set to price a £250m no-grow five-year. Barclays (LSE: BARC.L - news) , BNP Paribas (LSE: 0HB5.L - news) (B&D) and Citi set IPTs at 95bp-100bp over the Sep (Shanghai: 600021.SS - news) 2022 Gilt and followed with guidance at a final 90bp. Books peaked around £500m before settling in at £475m.

"We're dealing with big sterling redemptions in December so it was certainly a good time for them to come to market," a lead banker said. "Levels are where you would expect them to be, it's a good result."

The lead spotted Severn Trent Feb 2024s in the mid 90s over Gilts.

The company sold a £250m 1.125% Sep 2021 deal in June at 87bp over Gilts. That came on a book of over £750m via BNP (Paris: FR0000131104 - news) Paribas and Santander and has since tightened to 78bp bid, according to Tradeweb prices.

Deal steps

* Allocs out. Final books over GBP475m. HR 100% vs UKT1.75% Sep 2022; deadline 3pm. ISIN XS1729892924. (2:28pm)

* Spread set at G+90, size GBP250m no-grow. Books around GBP500m pre-rec and subject at 12:15pm. Allocs and pricing to follow. BNPP is B&D. (11:59am)

* IPTs UKT1.75% Sep 2022 +95/+100, GBP250m no-grow size. Pricing today. Due 4 Dec (Shanghai: 600875.SS - news) 2022, pay 4 Dec, EMTN docs, English law, London listing, 100k/1k denoms, Reg S bearer, MWC and residual call. BNPP is B&D. (8:49am)

Severn Trent Utilities Finance Plc (Ticker: SVTLN, Country: UK), guaranteed by Severn Trent Water Limited and rated A3/BBB+ (both stable), has mandated Barclays, BNP Paribas and Citi for a GBP250m 5yr senior unsecured benchmark transaction. Proceeds will be used for GCP. (8:49am) (Reporting by Pauline Renaud, editing by Julian Baker)