Skandiabanken covered bond switch approved

Holders of Skandiabanken Norwegian krone-denominated covered bonds have approved the Swedish bank’s plan to convert their covered bonds into obligations of a new Norwegian issuer it is setting up as part of plans to spin off its Norwegian banking operations.

Nordic Trustee, which handled the consent solicitation, announced yesterday that 100% of votes in all seven covered bonds included in the exercise were in favour of the resolution to convert the Swedish covered bonds into Norwegian covered bonds. The conversion is planned for 5 October.

The Norwegian krone covered bonds are backed by a cover pool of Norwegian residential mortgages. Swedish krona covered bonds issued by Skandiabanken backed by a Swedish cover pool will remain with the parent in Sweden.

A parallel move to switch two senior unsecured bonds to the new Norwegian bank – which is being created from Skandiabanken’s Norwegian branch and which will be the parent of the Norwegian covered bond issuer – is ongoing.