The expected implementation in Norway of a resolution regime equivalent to the EU Bank Recovery & Resolution Directive (BRRD) will result in Norwegian covered bonds having less exposure to bank defaults and losses, Moody’s said last Friday (14 August), highlighting the rating benefits this has led to.
Pohjola Bank turned to the Swedish krona market to raise Tier 2 debt on Tuesday after having retreated from a planned euro issue in June, and in doing so sold a Skr3.5bn FRN that is the largest single-tranche Tier 2 in the Swedish market and which market participants said offered savings for the Finnish issuer.
The latest Danish quarterly sales of bonds to refinance adjustable rate mortgages (ARMs) achieved healthy bid-to-cover ratios after Nykredit Realkredit kicked off activity on Monday, with longer dated paper offering relatively high spreads particularly well bid.
Stadshypotek sold a £300m three year FRN covered bond on Monday, proving that the sterling market is an appealing option for issuers and printing at a tighter price than could have been achieved in the domestic market, according to bankers.
The volume of one year adjustable rate mortgage (ARM) bonds is set to fall again when Danish mortgage credit institutions hold their latest quarterly refinancing sales later this month, with Nykredit having yesterday (Thursday) announced a sharp reduction in its auctions of such bonds.
Danske Bank announced second quarter pre-tax profits 17% ahead of consensus expectations on Wednesday, with commissions, costs and loan loss provisioning driving the results while net interest income (NII) held up.
A move by the Finnish FSA (Finanssivalvonta) to designate Nordea Bank Finland, OP Financial Group, Danske Bank and Municipality Finance as systemically important credit institutions, and therefore impose upon them additional capital requirements, is credit positive for the affected banks, according to Moody’s.
Nykredit Realkredit has confirmed it is targeting some Eu3bn (Dkr22bn) of bond issuance eligible for bail-in buffers over the next two years to bolster its capital after Standard & Poor’s downgraded it from A+ to A on Monday and left the rating on negative outlook.
Skandinaviska Enskilda Banken (SEB) kicked off Swedish banks’ Q2 results announcements on Tuesday with pre-tax profits of Skr5.3bn (Eu570m) that were 14% ahead of consensus expectations, with strong commission revenues offsetting a fall in net interest income.
Norwegian residential mortgage lending regulations will be tightened and the countercyclical buffer (CCB) for banks increased to 1.5%, the Ministry of Finance announced this week, while Norges Bank cut its key policy rate by 0.25% today (Thursday).