This will be our last update of the year for Nordic Financial Institutions & Covered Bonds and The Covered Bond Report and Crédit Agricole CIB would like to take the opportunity to wish our readers season’s greetings and all the best for 2014!

The Danish parliament will tomorrow (Friday) discuss government legislation on conditional forced maturity extensions in mortgage bonds for the first time, with the final draft softer than the initial proposal in a bid to address investor concerns.

Norwegian banks have strengthened their credit underwriting standards, according to a survey by the Norwegian Financial Supervisory Authority (Finanstilsynet), Moody’s noted yesterday (Wednesday), saying this is leading to an overall improvement in the credit quality of covered bond collateral.

Moody’s revised the outlook on Danske Bank’s rating from stable to positive on Tuesday because it expects the bank’s profitability to continue to improve while a high level of capital and a prudent risk profile are still maintained.

BRFkredit, Nordea Kredit and Realkredit Danmark finished the latest round of sales to refinance ARM bonds last Friday (29 November), with analysts noting that spreads were the lowest since before the crisis and that Nordea achieved the lowest absolute yield ever at an auction.

Danske Bank priced a Sfr150m 12 year non-call seven Tier 2 issue on Monday in a follow-up to a Nordic-targeted “Trekroner” subordinated debt sale last week, and in line with stated plans to explore Tier 2 issuance in European currencies.

Norway’s KLP Banken is setting up a mortgage covered bond issuer to lower its funding costs and generate financing to purchase retail mortgages booked with the KLP insurance company.

Fears are mounting that covered bonds could fail to secure a position as Level 1 LCR assets after it emerged that the EBA’s Board of Supervisors is against such a recommendation. However, the ECBC and others have said that Level 1 inclusion remains a real possibility.