Nordics

Moody's last Thursday placed on review for possible downgrade the mortgage and public sector Pfandbriefe issued by SEB AG.

Moody’s this (Tuesday) morning cut the rating of Skandinaviska Enskilda Banken AB from Aa2 to A1 and that of its German subsidiary, SEB AG, from A1 to Baa1, and left them both on negative outlook.

The Swedish government yesterday (Thursday) revised its guarantee programme for bank debt to encourage banks to raise more long term funding. Unsecured bank debt can now be guaranteed in maturities out to five years, making it look even more unlikely that Swedish banks will take up the option of issuing guaranteed covered bonds, which was already available for maturities of up to five years.

Nykredit on Monday introduced two-tier mortgage lending to finance commercial properties in a bid to avoid the potential costs associated with issuing junior covered bonds. The new approach involves the re-emergence of traditional mortgage bonds, issuance of which had fallen significantly after January 2008, when the Capital Requirements Directive (CRD) came into effect.

Standard & Poor’s yesterday (Tuesday) revised the outlook on Skandinaviska Enskilda Banken’s A rating from stable to negative.

Skandinaviska Enskilda Banken confirmed the growing recovery of the jumbo covered bond market yesterday (Tuesday), pricing the first Scandinavian benchmark in six months. And the issuer suggested that others who do not pay the spreads now necessary to tap the market are deluded.

Moody’s yesterday (Monday) downgraded Terra Boligkreditt’s covered bonds from Aaa to Aa2 and placed them on review for further downgrade.

Skandinaviska Enskilda Banken is due to price a Eu1bn five year mortgage-backed benchmark later today (Tuesday). Market participants have been encouraged to see a jumbo from a new jurisdiction and were today working out just what the implications of the deal are for other potential issuers.

Skandinaviska Enskilda Banken is today (Monday) tapping the market with a five year benchmark covered bond, the first in six months for an issuer away from France and Germany.

DnB Nor is setting up a new institution to issue covered bonds backed by commercial mortgages, while DnB Nor Boligkreditt will continue to focus purely on residential mortgage-backed issuance.

Skandinaviska Enskilda Banken is today (Friday) testing the market for a new benchmark covered bond, The Cover understands.

Moody’s yesterday (Wednesday) downgraded SpareBank 1 Gruppen’s long term issuer rating from A3 to Baa1, and left the rating on negative outlook, a day after cutting three members of the SpareBank 1 Alliance by one notch.