Nordics

Fitch on 22 December affirmed the AAA rating of DnB Nor Boligkreditt’s covered bonds and gave them an improved Discontinuity Factor after the Norwegian issuer extended the liquidity gap management period for its hard bullet bonds from six to 12 months.

Standard & Poor’s on 30 December changed its outlook on Nykredit Realkredit’s A+ rating from stable to negative because of pressures on its banking operations, but said that the asset quality of the group’s core lending business remained resilient.

Denmark’s mortgage banks have sold a record volume of mortgage bonds during the country’s traditional end-of-year auctions that are held to refinance variable rate mortgages. But very high bid-to-cover ratios suggest the large supply was easily absorbed.

Swedbank is guaranteeing covered bonds issued by Swedbank Mortgage as part of a “general, unconditional and irrevocable” guarantee of the issuer to maintain the mortgage bank’s A2 rating from Moody’s, which was affirmed today (Friday).

Standard & Poor’s today (Friday) downgraded DnB Nor’s long term counterparty credit rating from AA- to A+, on stable outlook, because of “sharply” deteriorating asset quality this year.

Terra Boligkreditt has sold a Nkr1bn (Eu118m) 10 year covered bond after a rise in yields enabled the issuer to offer a 5% coupon attractive to investors.

Two new Norwegian mortgage institutions have issued covered bonds backed solely by commercial mortgages, The Cover understands.

Norges Bank and Moody’s this week mentioned the positive effects the growth in covered bond funding is having in Norway, but also noted possible negative side-effects of the trend.

Danmarks Nationalbank will accept junior covered bonds as collateral for credit on a permanent basis from February 2010, the central bank has announced.

Moody’s yesterday (Monday) downgraded Nykredit Realkredit’s junior covered bonds from Aa2 to Aa3, concluding a review for possible downgrade initiated on 11 September.

A group of small Norwegian banks has set up a mortgage credit institution, Verd Boligkreditt, for the joint issuance of covered bonds. It will be run on their behalf by Sparebanken Vest, which also has its own covered bond vehicle.

SpareBank 1 Boligkreditt priced the first Norwegian jumbo since September 2008 yesterday (Tuesday) afternoon, a Eu1bn three year deal that the issuer told The Cover made good on its commitment to benchmark covered bond issuance every year.