Sweden’s Skandiabanken plans to issue its first covered bond at the end of the month after having turned to the asset class as part of its plans to use the capital markets to diversify its funding sources and support the banks’ growth ambitions, an official told The Covered Bond Report.

Nykredit Realkredit drew Skr50bn of orders when it sold Skr10.3bn (Eu1.18bn, Dkr8.81bn) of one year SDOs backed by Swedish mortgages in its third such sale last Thursday (August 29). Meanwhile DLR Kredit rounded off the latest Danish auction season today (Thursday).

Sweden’s SBAB launched a Eu750m seven year senior unsecured transaction last Thursday (29 August) and an official at the issuer said it contributes to the bank’s goal of extending its maturity profile and was timed to take advantage of strong market momentum.

Svenska Handelsbanken yesterday (Wednesday) priced the largest fixed rate senior unsecured deal in Swiss francs from an international FIG borrower since March 2011, a Sfr400m (Skr2.83bn, Eu325m) five year issue.

Svenska Handelsbanken re-opened the FIG flow primary market after a summer lull with a strong Eu1.25bn seven year senior unsecured transaction on Monday, paving the way for a flurry of issuance from its Nordic peers.

A Swedish National Debt Office (Riksgälden) proposal on how to implement the EU bank recovery and resolution framework in Sweden is credit negative for senior unsecured debt of the country’s banks, particularly of the four largest, Moody’s said today (Thursday).

Danish banks’ funding profiles are a weakness and the Swedish banking system shows a structural mismatch of assets and liabilities, Standard & Poor’s said in July in the context of a range of rating actions on banks and their debt in these jurisdictions.

Proposals that include the possible break-up of universal banks into separate retail and investment banking entities were rejected by the Swedish authorities in their response to the Liikanen Report on Tuesday.

Moody’s downgraded Länsförsäkringar Bank’s debt and deposit ratings from A2 to A3, on stable outlook, yesterday (Wednesday), citing relatively light capitalisation at the bank level, high growth rates in recent years, and market funding reliance.

Roughly 50% of investors holding government guaranteed bonds targeted by Swedbank for repurchase participated in a tender offer that closed on Monday, a take-up rate that an official at the issuer said made for a worthwhile exercise.