Nordics

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.

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”.