Nordics

Standard & Poor’s yesterday (Wednesday) upgraded the ratings on the covered bonds of Nykredit Realkredit’s General Capital Centre from AA to AAA in light of a new rating approach. In addition, AAA ratings were assigned to all the other covered bonds issued by Nykredit and subsidiary Totalkredit.

The Danish Ministry of Economic & Business Affairs and the Danish Insurance Association today (Friday) announced a set of initiatives to support the Danish life insurance and pension sector, and Danish covered bonds.

Storebrand Kredittforetak has increased its Nkr1bn April 2011 issue by Nkr500m (Eu58m), following DnB Nor Boligkreditt and Sparebank 1 Boligkreditt in building up unutilised holdings of covered bonds that it can use to access the Norges Bank liquidity facility that was announced on 12 October.

A new Danish central securities depositary in Luxembourg has made it possible for Danish mortgage institutions to issue covered bonds that are expected to be eligible as collateral with the European Central Bank and therefore more attractive for investors. Realkredit Danmark is from today (Tuesday) following Nykredit in using the new option.

The Swedish government on Monday announced a rescue package for the country’s financial system, which includes a bank debt guarantee scheme, a stabilisation fund to manage potential solvency problems, and equity injections. However, in contrast to most other European rescue plans, new covered bonds issues are explicitly included in the Swedish guarantee.

In brief: DnB Nor today (Tuesday) detailed its capacity to access the new liquidity measures announced by the Norwegian ministry of finance at the weekend.

Storebrand Kredittforetak on Friday issued the first tranche off a new five and a half year fixed rate covered bond of up to Nkr2bn with a yield of 5.95% per annum. The issue is the Norwegian institution’s fourth under a programme that was established in the spring of this year.

Moody’s has downgraded the covered bonds of Glitnir and Kaupthing from Aa1 and Aaa, respectively, to Ba3. The rating agency has also set the timely payment indicator (TPI) on the two issuers’ covered bonds to “very improbable”.

The Danish government and the Danish financial sector, represented by the Private Contingency Association, yesterday (Wednesday) announced a package to ensure financial stability in the country. The plan guarantees depositors’ and senior unsecured creditors’ claims against banks for two years, but covered bonds are explicitly excluded from the guarantee.

EuroWeek, in partnership with UniCredit, recently held a Nordic roundtable where major issuers discussed their experiences during the past year and how they have coped during the crisis.

Moody’s yesterday (Wednesday) reacted to the Icelandic government’s rescue of Glitnir Bank by downgrading the bank’s covered bond ratings from Aaa to Aa1. The ratings were placed on review for possible further downgrade.

The credit and (il)liquidity crisis struck Europe with a vengeance today (Monday), as the UK government took over Bradford & Bingley’s loan books and wholesale liabilities, Fortis was part nationalised by the Benelux governments, and Hypo Real Estate was forced to turn to the German government for funding.