KLP eyes September debut after Moody’s rating

Norway’s KLP Boligkreditt is close to making its covered bond debut, with a domestic issue targeted for launch this month, according to an official at the issuer, after Moody’s yesterday (Wednesday) assigned a provisional rating to the covered bonds.

KLP Boligkreditt is a subsidiary of KLP Banken, which received approval for the mortgage covered bond company in March. Moody’s yesterday assigned a provisional Aaa rating to the covered bonds, which it said would be backed primarily by Norwegian residential mortgage loans.

Kristian Lie-Pedersen, analyst, treasury at KLP Banken, said that the Moody’s rating is one of the final steps that needed to be taken and that the issuer is getting ready to launch its first deal.

“We will hopefully hit the market in September,” he told The Covered Bond Report. “We have been on a short roadshow in Norway and are basically in a position to issue.”

KLP will focus on Norwegian krone issuance.

According to Moody’s, the cover pool comprises 672 residential mortgage loans and substitute assets and amounts to Nkr675m (Eu83m).

“The residential mortgage loans have a weighted-average seasoning of 32 months and a weighted-average loan-to-value (LTV) excluding junior ranks of 40.0%,” said the rating agency.

The cover pool losses for KLP’s covered bonds are 10.1%, split between market risk of 5.2% and collateral risk of 4.9%. Overcollateralisation presently stands at 35%, of which none is provided on a committed basis. The Timely Payment Indicator (TPI) is “high”.