Denmark

Deutsche Bank may have come first in the all benchmarks ranking for the first half of 2008, but it was by no means the strongest across all markets. Here The Cover reveals the top banks in each of the biggest sectors and examines where the leading banks’ weaknesses lie.

Danske Bank priced a new five year covered bond yesterday afternoon (Tuesday) backed by international mortgage collateral from its Cover Pool I. The deal was increased from the minimum target of benchmark size and enjoyed an untroubled bookbuilding process.

Danske Bank has opened the books on a new five year euro benchmark bond backed by international residential mortgage collateral from its innovative Cover Pool I this morning. Like NordLB’s new five year public Pfandbrief, it was bolstered by robust support from domestic investors.

Danske Bank was unfazed by volatility in the Swiss franc market this week and priced a Sfr275m (Eu169m) seven year covered bond on Wednesday, its debut in the currency. Meanwhile, Erste Europäische Pfandbrief- und Kommunalkreditbank priced what was an unusually short maturity.

Danske Bank yesterday (Monday) afternoon increased the size of its euro jumbo debut from Eu1bn to Eu1.25bn, in contrast to its decision earlier this year to eschew international issuance for more attractive domestic funding. German issuers are seen among the likely candidates to add further supply.

Danske Bank has closed the books for the first euro denominated Danish jumbo covered bond, a two year deal backed by non-Danish mortgages marketed at guidance of the mid-swaps plus 10bp area.

The strength of an issuer’s domestic investor base has emerged as a key determinant of covered bond spreads since the crisis began last summer. Those that benefit have been able to relax, while those reliant on foreign investors have redoubled their efforts to penetrate new pockets of money.

With German public sector issuers returning in style this week, mortgage Pfandbrief and Scandinavian issuers are being tipped as likely successors in a market where the well stocked pipeline is as much a list of those that can’t access the market as a guide to who will be next. Indeed the problem for the primary market is that it looks like those that could issue won’t, and those that would issue can’t.

Danske Bank is holding off from launching its debut euro benchmark in light of the difficult market conditions and has instead raised Eu1.1bn equivalent in the domestic Danish krone market at tighter funding levels than are available in euros.

Danske Bank has mandated BNP Paribas, Danske and HSBC to jointly arrange its Eu15bn covered bond programme and lead manage its inaugural euro benchmark. The programme promises to be the first under which covered bonds will be backed by residential mortgages from a variety of jurisdictions.

Moody’s has assigned a triple-A rating to the covered bonds to be issued from Nykredit Realkredit’s covered bond programme. Most of the bonds are secured on residential and commercial properties in Denmark, Sweden and Norway.