Sweden Raises $3.4 Billion After Selling Remaining Nordea Stake

Sweden’s government raised 21.6 billion kronor ($3.4 billion) after selling its remaining stake in Nordea Bank AB as part of a broader plan to divest state assets and reduce debt.

The state sold about 284 million shares, equivalent to 7 percent of the share capital in Scandinavia’s biggest bank, at 76 kronor per share to institutional domestic and international investors, it said today. The shares were offered to investors at 75.50 kronor to 76 kronor, the term sheet showed.

“The government’s role is to regulate the banks, not to own them,” Financial Markets Minister Peter Norman said in a statement late yesterday, when the government announced the sale. “Bank shares are risky assets and banks require strict regulation and extensive supervision. The aim of the government is therefore to sell the state’s remaining stake.”

Prime Minister Fredrik Reinfeldt’s government earmarked Stockholm-based Nordea for divestment after coming to power in 2006 as part of a strategy to sell holdings, such as its stake in Sweden’s largest phone company TeliaSonera AB. It reduced its share in Nordea to 7 percent from 13.4 percent in June, raising 19.5 billion kronor by selling 260 million shares at 75 kronor apiece. It also cut its stake in February 2011, raising 19 billion kronor by selling shares at 74.5 kronor each.

Banking Crisis

The government has taken advantage of an increase of 28 percent increase in Nordea shares this year. The stock rose 1.1 kronor, or 1.3 percent, to 79.2 kronor yesterday, with the government announcing the planned sale after the market close. The shares slipped 2.8 percent to 77 kronor as of 9:18 a.m. in Stockholm.

State ownership of Nordea traces its roots to the nation’s banking crisis in the early 1990s, when predecessor Nordbanken was nationalized after losses wiped out its equity. Nordbanken was later merged with other Nordic lenders such as Finland’s Merita Bank to create Nordea. Its largest shareholder is Finland’s Sampo Oyj, which owns the biggest Nordic non-life insurer If, with a 21.4 percent holding as of the end of August.

Since coming to power, the Swedish government has cut public debt to 38.1 percent of gross domestic product at the end of last year, helped by the sale of Absolut vodka maker Vin & Sprit AB, real estate company Vasakronan and stakes in stock-market operator OMX AB and TeliaSonera. The National Financial Management Authority forecast on Sept. 3 that public debt will rise to 41.5 percent of gross domestic product this year, before gradually falling to 34 percent by the end of 2017.

The government has raised a total of 60.1 billion kronor this mandate period by selling Nordea shares, it said today. It named Morgan Stanley as global coordinator and joint book-runner of the stake sale and Bank of America Corp., Carnegie and Goldman Sachs Group Inc. as joint bookrunners.

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