RD preps first Swedish syndicated covered
Mar 13th, 2014Realkredit Danmark is planning its first syndicated sale of a Swedish krona covered bond, which could emerge next week after a day of investor meetings today (Thursday) in Stockholm.
Realkredit Danmark is planning its first syndicated sale of a Swedish krona covered bond, which could emerge next week after a day of investor meetings today (Thursday) in Stockholm.
Denmark’s mortgage credit institutions are nearing the end of the latest ARMs refinancing season, with a covered bond analyst suggesting that the sales did not quite go as expected.
Nykredit Realkredit sold its tightest syndicated Swedish krona covered bond today (Thursday), a Skr5.5bn (Eu614m, Dkr4.58bn) one year issue, after on Monday kicking off the latest round of auctions for refinancing of ARM bonds.
Realkredit Danmark released its 2013 full year results on Friday, reporting a Dkr158m increase in net profit to Dkr2.612bn (Eu350m), up 6% compared with 2012. It said that this captures a positive trend in core activities as well as higher funding costs and higher impairments.
BRFkredit, Nordea Kredit and Realkredit Danmark finished the latest round of sales to refinance ARM bonds last Friday (29 November), with analysts noting that spreads were the lowest since before the crisis and that Nordea achieved the lowest absolute yield ever at an auction.
Danish lenders are responding to regulatory and rating agency pressures to reduce the share of adjustable rate mortgages (ARMs) with the launch of Cita-based loans and a revival of fixed rate callables, with Moody’s highlighting Nordea Kredit’s success in the latter as credit positive.
Nykredit Realkredit kicked off autumn refinancing auctions in Denmark today (Thursday), with “extraordinarily high” interest coming in for its offering of one year ARM bonds, according to an official at the issuer, although an analyst said the outcome was not surprising.
Nykredit will launch its August refinancing auctions next Thursday, with one year ARM bonds dominating after a smaller than expected take-up of longer interest reset periods. Meanwhile, Realkredit Danmark is launching a Cita product aimed at addressing concerns about refinancing risk.
Spreads on Nykredit ARM bonds widened slightly today (Thursday) after some tightening of its one year bonds yesterday broke a softening trend, while levels on Realkredit Danmark and DLR Kredit one year bonds were almost unchanged.
Nykredit Realkredit will kick off Denmark’s next round of ARM refinancing auctions on 25 February, with Nordea Kredit following suit a day later and Realkredit Danmark starting its auctions on 4 March, according to preliminary information recently announced by the banks.