Denmark

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.

Bayerische Landesbank and Danske Bank have priced their first government-backed senior unsecured issues on the back of larger order books and the next deals from Germany and Denmark are said to have been mandated for launch soon.

Danske Bank launched the first government-guaranteed deal for a Danish bank this (Wednesday) morning. Bayerische Landesbank opened books on a SoFFin-backed deal, while unguaranteed senior supply has reached new areas.

Euro denominated mortgage bonds issued by Danish covered bond institutions through a new Luxembourg-based central securities depositary have been approved as collateral for loans with the European Central Bank.

Danish covered bond issuers have completed the December auctions of their covered bonds. Dkr300bn (Eu40.3bn) of Danish krone bonds and Eu9bn of euro denominated bonds were sold to investors.

Investor appetite for covered bonds sold so far at Danish mortgage banks’ December auctions is as healthy as it has been in previous years, according to market participants, putting to rest fears that difficult market conditions would deter investors from participating in the auctions.

Anyone worried about deteriorating asset quality and the state of European mortgage markets would have felt their spirits lifting during the opening panel of the European Mortgage Federation’s sixth annual conference in Brussels yesterday (Thursday). Representatives from Denmark, Poland, the Netherlands, Germany and Belgium painted a reassuring picture of the state of their country’s mortgage markets.

Standard & Poor’s yesterday (Wednesday) upgraded the ratings on the covered bonds of Nykredit Realkredit’s General Capital Centre from AA to AAA in light of a new rating approach. In addition, AAA ratings were assigned to all the other covered bonds issued by Nykredit and subsidiary Totalkredit.

The Danish Ministry of Economic & Business Affairs and the Danish Insurance Association today (Friday) announced a set of initiatives to support the Danish life insurance and pension sector, and Danish covered bonds.

A new Danish central securities depositary in Luxembourg has made it possible for Danish mortgage institutions to issue covered bonds that are expected to be eligible as collateral with the European Central Bank and therefore more attractive for investors. Realkredit Danmark is from today (Tuesday) following Nykredit in using the new option.