Regulatory proposals from the Norwegian and Swedish FSAs that detail amortisation requirements would be credit positive for the respective covered bonds, according to Moody’s, which cited the substantially lower default expectations of mortgages with the LTV levels that borrowers would have to amortise down to.

Aktia Bank issued a Eu500m seven year covered bond on Tuesday that overcame difficult market conditions to attract a diverse Eu1.5bn order book that represented the highest level of oversubscription on any benchmark for two weeks.

The Estonian Banking Association (Eesti Pangaliit) is working on a proposal for covered bond legislation that it expects to finalise soon, ahead of submission to the ministry of finance for official drafting. Mihkel Hollo, head of the covered bond working group at the association and project manager at Swedbank in Tallinn, discusses developments in Estonia.

New Swedish mortgages originated from August must be amortised down to a LTV of 50%, under new regulation unveiled by the Swedish FSA that will be credit positive for Swedish cover pools, according to an analyst.

Realkredit Danmark sold a Skr4.3bn (Eu465m) three-and-a-half year floating rate note on Tuesday that a syndicate banker at one of the leads said had succeeded in spite of selling pressure in Swedish covered bonds, while a Norwegian krone deal from the issuer imminent.

DNB hit a weak market when it launched a $750m (Nkr6.12bn, Eu699m) Additional Tier 1 transaction yesterday (Thursday), with the book size and pricing off highs witnessed on recent US dollar Nordic AT1 supply.

Jyske Bank achieved high international distribution with a Eu500m (Dkr3.73bn) three year FRN on Tuesday in spite of a weak financials market, and the bank might launch a Eu300m Tier 2 issue later this year before stepping up the frequency of its senior unsecured issuance.

With an increasing share of the covered bond market trading at negative yields, Crédit Agricole CIB analysts Florian Eichert and Stephan Dorner explore the impact on issuers and investors.

Increasing economic risks may lead to bank downgrades in Norway and Finland, Standard & Poor’s has warned, while the introduction of bail-in regulation is putting pressure on banks across the Nordics. However, it sees positive signs for Icelandic banks.

SBAB sold its first Additional Tier 1 issuance on Monday, Skr1.5bn (Eu163m) of perpetual non-call five notes split into fixed and floating rate tranches that were priced just 15bp wider than where Nordea last week issued krona AT1.