Nordics

The Swedish National Debt Office yesterday (Tuesday) announced the bank-specific fees for use of the state guarantee for covered bonds. All charges for the guarantee programme have now been set.

Investor appetite for covered bonds sold so far at Danish mortgage banks’ December auctions is as healthy as it has been in previous years, according to market participants, putting to rest fears that difficult market conditions would deter investors from participating in the auctions.

Rating news: The Swedish Covered Bond Corp must take certain remedy actions set out in the documentation of its covered bond programme to mitigate the downgrade of its parent’s ratings by Standard & Poor’s last Wednesday, the agency said today (Monday).

Finland will include covered bonds within its planned guarantee scheme, according to a ministry of finance official. However, the impact of the guarantees for covered bonds is likely to be limited.

Rating action: The Swedish Housing Finance Corp, SBAB, was yesterday (Wednesday) downgraded by Standard & Poor’s from AA- to A+. The AAA ratings of the covered bonds of its subsidiary, the Swedish Covered Bond Corp, were not affected.

Sparebanken Vest Boligkreditt today (Monday) executed its inaugural covered bond issue, but, like other Norwegian issuance in the past month, it is being retained.

Anyone worried about deteriorating asset quality and the state of European mortgage markets would have felt their spirits lifting during the opening panel of the European Mortgage Federation’s sixth annual conference in Brussels yesterday (Thursday). Representatives from Denmark, Poland, the Netherlands, Germany and Belgium painted a reassuring picture of the state of their country’s mortgage markets.

In brief: Storebrand Kredittforetak has increased and retained its Nkr1.5bn May 2011 issue by Nkr2bn to further build up its unutilised holdings of covered bonds that can be used to access Norges Banks’ liquidity facility.

Norway’s Sparebanken Vest is preparing to launch its first covered bonds, having set up Sparebanken Vest Boligkreditt.

The European bond market is bracing itself for a pick-up in guaranteed senior unsecured issuance from a wider range of jurisdictions as banks put the final touches to their new documentation and regulators release precise details of their respective guarantees.

While the Swedish National Debt Office has announced the fixed fees for its guarantee scheme and the bank-specific fees for guaranteed senior unsecured debt, market participants are still waiting for news on the individual fees that will be charged for guaranteeing covered bonds.

The Finnish parliament is debating a government proposal for state guarantees for banks’ unsecured debt and The Cover understands that the guarantee is expected to be extended to covered bonds, as in Sweden but not most other countries.