BRFkredit prepares euro benchmark covered bond debut

BRFkredit is set to launch an inaugural euro benchmark covered bond in a move that an official at the Jyske Bank subsidiary said will reduce its refinancing of Danish krone bonds while taking advantage of funding opportunities in the European market.

The Danish mortgage credit institution on Tuesday announced a mandate for a series of investor meetings across Europe ahead of the potential inaugural euro benchmark covered bond issue. The meetings will commence next Monday (7 March) and conclude on Friday.

The deal will be a euro benchmark in line with issuance from the majority of covered bond markets rather than simply Danish-style match-funded issuance in euros, with BRFkredit becoming only the second Danish issuer to go down that route after Danske.

The Danish mortgage credit institution – which is wholly owned by Jyske Bank – yesterday (Monday) announced that it will in future finance part of its mortgage loans under joint funding agreements with bonds denominated in euros.

“This action will reduce the annual refinancing of bonds denominated in Danish kroner and at the same time take advantage of the funding opportunities in the European bond market,” said Lars Waalen Sandberg, executive vice president at BRFkredit.

A lead syndicate official noted that BRFkredit has already issued euro-denominated paper in the senior unsecured market, with one benchmark outstanding, a Eu500m January 2018 fixed rate deal.