Denmark

Moody’s yesterday (Thursday) downgraded DLR Kredit’s issuer rating from A1 to A3 under the rating agency’s new methodology for rating financial institutions that specialise in issuing covered bonds on behalf of an owner bank or a group of banks.

Danske Bank yesterday (Wednesday) issued a Nkr800m (Eu95m) fixed rate note to complete its Norwegian krone follow-up to a Eu1.25bn six year euro benchmark it sold last Wednesday.

Danske Bank on Friday issued a Nkr1.5bn (Eu178m) five year floating rate note as a follow-up to a euro benchmark priced on Wednesday.

Danske Bank priced a Eu1.25bn six year covered bond in the middle of guidance of the 45bp over area yesterday (Wednesday). A tighter trade would have been possible, said a syndicate official at one of the leads, but with a slightly weaker tone to the market the leads did not want to jeopardise the issue’s chances of performing in the secondary market.

A Eu1bn five year cédulas hipotecarias for Banco Bilbao Vizcaya Argentaria priced at the wide end of guidance could signal a welcome leveling of the balance of power between investors and issuers in the covered bond market, according to one banker this (Wednesday) morning. Meanwhile Danske is in the market with a new issue, National Bank of Greece has completed the first Greek benchmark, and we include here a wrap-up of some distribution statistics from earlier in the week. [Updated to correct BBVA pricing.]

Danske Bank has mandated BNP Paribas, HSBC and UniCredit to manage a new issue alongside itself. The banks are in discussion with clients about a potential six year transaction, said a syndicate official at one of the leads.

Covered bonds made a comeback in the Swiss franc market this week, as investors reached for a highly rated asset class that, unlike other triple-A product, still offers a spread above mid-swaps.

In this roundtable discussion, sponsored by Danske Bank and Nykredit, leading market participants – including issuers, investors and the Danish central bank – examine how Denmark has coped through the crisis and what the future holds for the country’s covered bond market.

Moody’s on Friday placed BRKkredit’s covered bonds and Nykredit Realkredit’s junior covered bonds on review for downgrade.

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.