A drop in confidence in Danish covered bonds was one of four downside risks highlighted by the International Monetary Fund (IMF) upon the conclusion of its latest report on the Danish economy last week, although the supranational body acknowledged progress being made by the authorities in tackling the area.

Moody’s expects Swedish banks to make early, sizeable issuances of Additional Tier 1 (AT1) instruments, while Standard & Poor’s expects a similar trend across Nordic banks, which it said are pulling away from their European peers in terms of capital strength.

Throughout the sovereign crisis, covered bonds were a remarkably stable asset class that at the same time offered a wide range of investors an attractive investment case, write Crédit Agricole CIB covered bond analysts in their outlook for 2015.

Moody’s upgraded Danske Bank from Baa1 to A3 last week, citing as the main driver continued improvement in the Danish bank’s profitability, with reduced refinancing risk in its mortgage credit operations another factor.

Carsten Tirsbæk Madsen will in the new year take over as president of the Covered Bond & Mortgage Council, the umbrella organisation for the European Mortgage Federation and European Covered Bond Council.

Norway came top out of six countries in a Moody’s ranking of how strong different jurisdictions are with respect to eligibility criteria for cover pool assets based on a combination of covered bond law and market practice, while Sweden was first taking into account only the covered bond law.