Denmark

Moody’s yesterday (Tuesday) downgraded several Scandinavian financial institutions that either issue covered bonds or are closely linked to issuers, concluding reviews for possible downgrade that were initiated on 22 July.

Moody’s yesterday (Wednesday) placed on review for possible downgrade the long term ratings of several Nordic covered bond issuers.

Danish mortgage banks’ tradition of holding auctions once a year in December to refinance covered bonds that fund one year adjustable rate mortgages is facing changes.

Danske Bank is set to price its third euro benchmark covered bond and its first since June 2008 this (Wednesday) afternoon at the tight end of guidance.

Swedbank Mortgage will this (Friday) afternoon price the first Swedish jumbo since the European Central Bank’s announcement three weeks ago, a Eu1.25bn five year mortgage-backed benchmark. And a further issue from non-euro Scandinavia could be on the horizon.

Nykredit on Monday introduced two-tier mortgage lending to finance commercial properties in a bid to avoid the potential costs associated with issuing junior covered bonds. The new approach involves the re-emergence of traditional mortgage bonds, issuance of which had fallen significantly after January 2008, when the Capital Requirements Directive (CRD) came into effect.

The US should look to the Danish mortgage bond system for lessons on how to operate a stable and functioning market, suggested panellists on a forum hosted by Nykredit at the Euromoney Bond Investors Congress on Tuesday.

Moody’s on Friday concluded a review for possible downgrade of Danske Bank’s rating by cutting the bank by two notches from Aa1 to Aa3, with a stable outlook.

Fitch and Standard & Poor's have downgraded Danske Bank, citing the economic downturn in many of the countries in which the Denmark-based bank operates.

Commerzbank will today (Friday) price the first unguaranteed senior unsecured bond from a German issuer since the collapse of Lehman Brothers.

The government guaranteed bank debt market was the juncture of two waves of negative sentiment in the markets this week, as downgrades hit the sovereign market and financial institutions suffered renewed pressure.

As part of a second aid package for Danish banks, the Danish government has extended guarantees to junior covered bonds in a move aimed at protecting the outstanding covered bonds of Danish mortgage institutions.