Denmark

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.

Nykredit today (Thursday) announced that it will begin issuing new Danish covered bonds, Særligt Dækkede Obligationer (SDOs), from the end of December to finance the mortgage lending of Nykredit and subsidiary Totalkredit.

In the UniCredit* Nordic covered bond roundtable participants discussed the boom in euro issuance from the region, and what differences and similarities there are between issuers and markets.

While Nordic issuers have not been able to completely avoid the recent turmoil in the covered bond market, their credit quality and relative scarcity have served them well, and investors’ enthusiasm for their paper has enabled them to achieve funding levels as good as, if not better than, expected.

With the key Norwegian piece slotting into place next to Sweden and Finland, all that is needed is Denmark to complete the Nordic covered bond jigsaw. Bankers say that the region may also emerge as a test-bed for the next generation of products in terms of geographical diversification, such as multi-jurisdictional deals with mortgages in the cover pool drawn from a number of countries. Philip Moore reports.