Nykredit Realkredit kicked off autumn refinancing auctions in Denmark today (Thursday), with “extraordinarily high” interest coming in for its offering of one year ARM bonds, according to an official at the issuer, although an analyst said the outcome was not surprising.

Nykredit will launch its August refinancing auctions next Thursday, with one year ARM bonds dominating after a smaller than expected take-up of longer interest reset periods. Meanwhile, Realkredit Danmark is launching a Cita product aimed at addressing concerns about refinancing risk.

Danske Bank is considering its options for dealing with a change in methodology by Standard & Poor’s that means certain features of Tier 2 subordinated debt issued in September no longer count toward the bank’s RAC ratio, it said on 17 July.

Covered bonds should be exempt from a proposed large exposure limit under Basel III, especially in local currency areas such as Denmark and Sweden, industry bodies argued in response to a Basel consultation ending last Friday (28 June).

Standard & Poor’s expects a shift in the Danish mortgage market towards longer term and CITA-linked loans, despite questions about their popularity in light of the costs associated with such mortgage products.

DLR Kredit sold a heavily oversubscribed Dkr2bn (Eu268m) October 2016 senior secured issue on Tuesday, benefitting from a tightening of spreads after the ECB rate cut at the beginning of May, according to the issuer and leads.

DLR Kredit is planning to launch its second senior secured issue later this month, a Dkr2bn (Eu268m) maximum deal, while Nykredit has become the first Danish mortgage bank to take advantage of legislative changes allowing §15 issuance out of RO capital centres.

A Eu500m five year Nykredit Realkredit senior secured deal met with “massive” demand on Monday, including orders from first-time buyers in Asia, Portugal and Spain, said an official at the issuer, as a shift away from the “Junior Covered Bond” name made for an easier sale.

Nykredit Realkredit announced the mandate for its third euro senior secured benchmark yesterday (Wednesday), which it aims to issue within a “fairly short timeframe”, according to an official at the bank. Meanwhile, S&P has raised some concerns about the implications of a legal change broadening the use of junior covered bonds.

Denmark’s mortgage banks should take a more conservative approach to lending in a bid to reduce risks that the granting of overly accommodative types of loans and covered bond issuance have introduced, the country’s central bank governor said in a speech on Tuesday.