Nordics

SCBC mandated leads for a seven year covered bond on Wednesday, the second in that tenor from Sweden and the third in that tenor overall this week. The transaction comes as RBC struggled to build strong demand for its seven year after Bund yields soared. Yorkshire Building Society has responded to concerns around volatility and mandated leads for a shorter maturity.

Skandinaviska Enskilda Banken returned to the covered bond market on Tuesday after an 18 month absence to print a €1bn deal with a longer maturity, tighter spread and lower new issue premium than Toronto Dominion was able to do a day earlier.

Skandinaviska Enskilda Banken AB (SEB) has mandated leads for its first covered bond since October 2013 and the third only Swedish deal to be issued this year. The deal is likely to offer three times the coupon of the previous Swedish covered bond.

Henrik Stille, covered bond portfolio manager at Nordea Investment Management in Copenhagen talks to The Cover about the fixed income rout, the rates outlook, what it means for covered bonds and how he managed to beat the index and deliver a solid return.

Benchmark euro covered bond issuance from a core borrower is expected soon after Rabobank and Swedbank reopened the senior market. Meanwhile, DNB Boligkreditt followed ANZ into the dollar 144A market on Wednesday with a similarly sized deal, in the same tenor and at the same price.

The dollar market continued to sustain covered bonds on Wednesday as DNB mandated leads for a five year, a day after ANZ issued $1.25bn in the same tenor. The Australian bank got better execution than would have been achieved in euros and could have priced even tighter. The excellent result is testimony to the issuer’s long absence and to the depth of demand evident across the dollar fixed income market.

Ålandsbanken priced a €250m no-grow five year Finnish covered bond on Tuesday after an extensive marketing period. The trade offered a decent pick up over where the comparables named by the leads were quoted.

Ålandsbanken is lining up to price a €250m covered bond and is meeting investors in Europe from May 5 – 12. This will be the Finnish bank’s largest covered bond to date.

Swedbank returned to covered bonds for its third funding exercise on Wednesday but decided against issuing off its 144A programme to launch in Reg S format for its first dollar benchmark of the year. The decision came as euro rates markets suffered a further bout of intraday volatility following last week’s extraordinary instability. And as Caffil tapped its 35s.

Draft Swedish regulation, requiring compulsory repayment of mortgage loans until the loan to value ratio gets below 50%, has been dropped. However, lending practices had already become stricter, so dropping the requirement changes little, said LBBW research on Thursday.

Sparebanken Vest Boligkreditt priced the first Norwegian covered bond of 2015 flat to its existing curve on Wednesday. The deal illustrates that rare issuers from core regions are still able to get superb execution despite the more skittish tone in credit markets lately.

The covered bond primary market is expected to maintain momentum on Wednesday as books for the first deal from Norway and the third from Belgium are expected to open.