Finland

Oma Savings Bank plans to open order books for a covered bond on Wednesday following an earlier roadshow. The deal comes amid a dearth of covered bond supply this week and a return to negative rates suggesting good scope for ultra-long dated supply.

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Nordea managed to raise €1.5bn of seven year funding at 4bp over mid-swaps on Monday — the tightest spread of any covered bond issued this year, other than in Germany. But subscription ratios for core covered bonds are falling and some key investors are lowering their orders.

Finland is unlikely to join the growing band of sovereign green bond issuers, after the head of its treasury’s finance division said that adding the format to its funding mix “would not help the liquidity of our nominal benchmark bonds”.

Nokia had much to be thankful for on Monday when it issued a €750m seven year bond at 170bp over mid-swaps — the same level at which its older five year bond was trading at the beginning of this year.

Covered bonds issued by Intesa Sanpaolo, Axa Bank and Aktia on Tuesday “flew out the door”, according to leads, with the depth and breadth of demand surpassing expectations. The superb conditions may not last, but exuberance is expected to prevail for now.

Siemens, the German engineering group, and Fortum, the Finnish electricity company, hit the corporate bond market on Tuesday with big, multi-tranche euro deals totalling €5.5bn. Both achieved great terms at long tenors in an otherwise quiet market.

OP Corporate Bank came with tight pricing for its first ever green bond on Tuesday. The Finnish lender took just two and a half hours to complete its trade, over three months after it first spoke with investors about a possible transaction.

The Mortgage Society of Finland has mandated leads for a roadshow with a view to issuing a seven year deal. It follows Volksbank Wien which mandated leads last week and precedes a number of issuers expected to announce mandates after emerging from blackout.

Two Nordic telecoms companies sold euro corporate bonds this week after both spending nearly two years on the sidelines. Both employed no-grow strategies, and Swedish company Telia sold the longest maturity corporate bond deal of 2019 so far.

On Thursday, the European corporate bond market saw its second Nordic telecoms new issue of the week. Finnish company Elisa used the same no-grow strategy as its Swedish peer Telia used on Tuesday, but for a smaller deal.

OP Mortgage Bank has issued the first Finnish covered bond of the year and did so at the same spread and in larger size than DZ Hyp managed little more than two weeks ago. With 10 year Bund yields heading towards zero, yield starved investors are chasing the market even tighter.