Finland

New Finnish covered bond legislation due in July could make indirect issuance an option for smaller institutions, according to market participants, and will do away with legal distinctions between mortgage-backed and public sector-backed issuance. (This follows up on an article from Monday.)

The introduction of a new Finnish covered bond law, expected for July, should not affect the issuance strategies of the country’s two issuers, but could result in at least one new institution entering the market.

Standard & Poor’s has affirmed its ratings of covered bonds issued by Deutsche Genossenschafts-Hypothekenbank and Finland's OP Mortgage Bank at AAA under its revised methodology.

SNS Bank opted for a Eu1bn size for a seven year covered bond launched yesterday (Wednesday) to ensure a good performance, said a syndicate official at one of its leads, although the size and quality of the order book would have allowed for a larger deal. Meanwhile, Aktia Real Estate Mortgage Bank hit the tight end of guidance but nevertheless paid a premium for the issue’s Eu500m size.

SNS Bank and Aktia Real Estate Mortgage Bank have been in the market today (Wednesday), building books for new covered bond issues after the pricing of benchmarks for Dexia Kommunalbank Deutschland and Erste Bank yesterday (Tuesday).

SNS Bank has mandated lead managers for a new covered bond that is expected this week, and several other issuers are said to be candidates for issuance in the coming days.

Benchmark supply is expected to be thin on the ground this week, even though some institutions have concluded preparations for covered bond issuance. But while blackouts and an unpredictable sovereign market might stymie euro supply, bankers have not ruled out shorter dated issuance from core jurisdictions.

GCE Covered Bonds has closed the order books for a three year benchmark that will be priced at the tight end of revised guidance later today (Tuesday). Swedish Covered Bond Corporation could be the next issuer to follow, having announced a mandate for a five year deal.

Aareal Bank was first into the covered bond market this (Monday) morning, opening books on a Eu500m five year mortgage Pfandbrief. Meanwhile, Groupe Caisse d’Epargne is building a shadow order book for its first benchmark since September 2008 and a handful of other issuers have announced mandates.

OP Mortgage Bank built the biggest order book of this week’s deals for a Eu1.25bn five year benchmark that was priced at 40bp over mid-swaps yesterday (Thursday). The issuer told The Cover that it usually comes to the market in the spring, but that this year it paid off to postpone its transaction.

EBS Mortgage Finance is taking orders for a Eu1bn three year mortgage-backed benchmark at the 175bp over mid-swaps area today (Thursday), while OP Mortgage Bank was this morning twice oversubscribed on a Eu1.25bn five year.

EBS Mortgage Finance and OP Mortgage Bank are sounding out investors today (Wednesday) for what are said to be three and five year deals, respectively. Fortis Bank Nederland’s planned debut is also being discussed.