Stadshypotek set for Finnish pool, with Danish option

Stadshypotek looks set to issue covered bonds backed by a dedicated Finnish residential mortgage cover pool under Swedish legislation, after Moody’s yesterday (Thursday) announced a provisional Aaa rating for such covered bonds, with issuance off a Danish pool also a possibility.

The Swedish issuer has for some four years been issuing covered bonds backed by a Norwegian cover pool alongside that off its domestic Swedish cover pool, and, like that backed by the new Finnish pool, the Norwegian mortgage-backed issuance has been under Swedish legislation.

Moody’s assigned the Aaa rating based on data relating to a provisional cover pool as of 1 September sized at Eu1.64bn (SEK15bn). It primarily contains residential mortgage loans (92.5%) but also multi-family loans (5.7%) and public sector loans (1.8%). The Moody’s collateral score is 5.2%, while overcollateralisation is 6%.

The Svenska Handelsbanken subsidiary’s Finnish move is the latest in a series of developments relating to Finland this year, with Nordea switching its issuance to a dedicated issuer and the Central Bank of Savings Banks Finland and Mortgage Society of Finland set to launch debuts.

The option to issue Finnish notes is reflected in a change between November 2014 and November 2015 to the offering circular related to Stadshypotek’s covered bond issuance, and the updated document also includes a new reference to Danish notes. It says the issuer has established an asset pool consisting of Danish loans and mortgages alongside Swedish, Norwegian and Finnish pools.