Low rates are the most significant risk to Danish and Finnish banks in the next two years, according to delegates surveyed by Fitch this week, with household indebtedness considered the biggest risk for Swedish banks and oil prices for Norwegians, but the rating agency said Nordic banks are well positioned for the oncoming “storm”.
Stadshypotek looks set to issue covered bonds backed by a dedicated Finnish residential mortgage cover pool under Swedish legislation, after Moody’s yesterday (Thursday) announced a provisional Aaa rating for such covered bonds, with issuance off a Danish pool also a possibility.
Iceland’s Arion sold a €300m (ISK41.9bn) three year senior unsecured bond on Tuesday, its second public euro-denominated issue, attracting mainly real money accounts and confirming the ability of Icelandic banks to access international markets at lower costs, according to the bank’s CEO.
DNB Boligkreditt attracted Eu2.2bn of demand for a Eu1.5bn seven year covered bond on Tuesday, before fellow Norwegian issuer Eika Boligkreditt sold a twice oversubscribed Eu500m seven year on Wednesday, having moved forward its plans to capitalise on strong demand in the seven year part of the curve.
The European Covered Bond Council will in the coming months focus on addressing the impact of risk-weight floors for mortgages being proposed by the Basel Committee, which representatives of the Danish FSA and issuers questioned at an ECBC plenary yesterday (Thursday).
LF Hypotek sold a €500m (SEK4.64bn) seven year covered bond on Tuesday, building an almost three times oversubscribed book while also setting the tightest price of any Nordic issue in the maturity this year.
Jyske Bank sold a debut €500m fixed rate senior unsecured benchmark bond yesterday (Thursday), and an official at Jyske explained that it had moved away from its previously preferred FRN format because of a changing regulatory environment. SBAB on Monday sold its first fixed rate senior issue in two years.
Danske attracted over €4bn of demand for a €1bn five year senior unsecured bond that surpassed expectations on Wednesday in an otherwise quiet week, with investors “scrambling” for what a lead banker said may be one of the last offerings of single-A rated senior paper before the onset of blackout periods.
The Mortgage Society of Finland is set to launch a debut, Eu250m covered bond from a new programme within the next three months and aims to become a frequent issuer, according to an official at the Finnish credit institution, after it received a preliminary AAA rating from S&P.