Ålandsbanken eyes Q3, Q4 deals, adds Swedish

Sep 4th, 2014

Ålandsbanken is aiming to increase the share of covered bonds in its funding profile, according to an official at the issuer, as it prepares to go on a roadshow linked to plans for a euro deal backed by its cover pool of Finnish residential mortgages.

AlandsbankenThe Finnish issuer made its euro covered bond debut in September 2012, with a Eu300m three tranche issue.

On Monday it announced that it will conduct investor update meetings next week, and Heli Huhtala, head of group treasury at Ålandsbanken, said that these are linked to the issuer’s plans to sell a deal backed by its cover pool of Finnish residential mortgages.

“Many are talking about five years as the sweet spot, but we need to find out what investors’ needs are and how can we combine those with our own funding needs,” she said. “In the fourth quarter the aim is also to do a deal off our Swedish cover pool. This is according to our funding plan.

“We have an issue maturing in the middle of September, and we are looking at the market to see where interest lies,” she added.

Any new issue would be of sub-benchmark size. Ålandsbanken’s covered bonds are issued under the Finnish covered bond legislation.

The Swedish cover pool was opened in June and one deal backed by that has been issued so far, a Skr1bn (Eu109m) short five year, according to Huhtala.

Ålandsbanken is aiming to increase its covered bond issuance, supported by growth of its cover pools, she said.

“Our total available collateral has increased by 70%-80% since 2012 so we have more room to issue despite the frequent issuance in the past two years,” she said. “Our strategy is to fund ourselves mainly via deposits and covered bonds, and we are increasing the share of covered bonds in our funding profile.”

Available collateral in for Ålandsbanken’s Swedish cover pool stands at Eu460m equivalent, according to Huhtala. Its Finnish counterpart has grown from Eu1.1bn to Eu1.4bn.

“The available collateral has increased because we have been lending more both in Finland and Sweden, and because of changes to the way property valuations are calculated,” she said. “That has recently led to an increase of around 25% in Finland.”

Ålandsbanken’s covered bonds are rated AA by Standard & Poor’s for both Finnish and Swedish pools.

Its most recent covered bond in euros was a Eu100m long five year at 38bp over mid-swaps in early December, backed by the issuer’s Finnish cover pool.

Commerzbank and Danske Bank are working with Ålandsbanken on its roadshow.

Email this to someoneShare on LinkedInTweet about this on TwitterShare on Google+Share on FacebookShare on RedditDigg thisPin on PinterestShare on Tumblr
Tags: , , , ,