Realkredit Danmark ended auctions of ARM bonds on a strong note last Friday (15 March), with its sale of one, three and five year bonds also bringing to a close the latest refinancing round by Dutch mortgage banks, with some Eu31bn equivalent of ARM bonds auctioned in total.

Swedbank and Svenska Handelsbanken tapped the dollar market with covered and senior deals, respectively, after DNB reopened the US market for European covered bonds last week, with attractive funding, investor diversification, and less execution risk than in euros behind their moves.

Länsförsäkringar Hypotek launched a Sfr125m (Eu101m) 10 year covered bond on Thursday of last week (14 March), which allowed the Swedish issuer to extend its curve to 10 years and was priced through the curve of domestic Swiss covered bond issuers, according to an official at the bank.

The Association of Danish Mortgage Banks and the Danish central bank fear adverse effects on financial markets from an EU financial transaction tax (FTT), with the association focussing on perceived negative consequences for Danish mortgage bonds.

A committee of the Danish Ministry of Business & Growth has recommended a quantitative approach to identifying systemically important financial institutions (SIFIs) under which six of Denmark’s financial groups would be designated SIFIs, with DLR Kredit additionally qualifying for qualitative reasons.

The euro primary market has over the last two weeks been subdued, with only five public benchmarks being priced in covered bonds as well as the senior unsecured space. We note a number of reasons for this relative drought in what is usually a busy quarter for the debt capital markets.

An official at Stadshypotek said that the end result of a Eu1bn long five year covered bond benchmark on Tuesday was satisfactory, even though guidance had to be widened 5bp from initial price thoughts suggested by banks that turned out to be too aggressive.

Asset encumbrance is one of those topics that everyone talks about but where discussions hardly ever go beyond very shallow, general statements.

A proposal by the Norwegian Financial Supervisory Authority (Finanstilsynet) to tighten risk weights for residential mortgages is credit positive as it would press Norwegian banks to further strengthen their capital bases, Moody’s said on Monday.

Moody’s published a credit assessment of Finland’s legal framework for covered bonds on Tuesday, highlighting several strengths of the country’s market, but citing weaknesses with respect to cover pool monitors and to covered bondholders’ rights over certain overcollateralisation.