Kleinwort in Swedish sell-off

MORE THAN 750,000 customers of Stadshypotek, Sweden's biggest mortgage lender, will be offered shares in the group when it is privatised and demutualised in the autumn, using Kleinwort Benson as its adviser, writes John Willcock.

Stadshypotek has about a third of Sweden's mortgage market, and its lending is divided between home-buyers and commercial organisations. The flotation on the Stockholm stock market will raise 3bn Swedish kronor in two tranches, one this autumn and one next year.

The group is forecast to turn in a profit this year, after a Skr866m loss last year. It has already announced a Skr303m profit for the first quarter.

The deal, similar to Abbey National's sell-off to customers in 1989, is part of a big privatisation drive by the Swedish government. The average tax rate in Sweden is still well over 50 per cent.

Roughly 55 per cent of Stadshypotek is expected to be taken up by the group's borrowers.

The deal should also expand the base of the Swedish bond market. Stadshypotek is already Sweden's second-biggest bond issuer after the state.

The group will issue a prospectus in September and achieve its Stockholm listing in November, ending its link with the government.