Nordics

ING and Skandinaviska Enskilda Banken (SEB) said this week they would redeem dollar-denominated additional tier one (AT1) bonds at their first call dates, despite the economic and market implications of Covid-19.

Denmark and Sweden unveiled a number of policies to combat the economic effects of the Covid-19 pandemic this week, with big changes to their funding plans. Sweden has decided to focus on the short end with an increase in treasury bill and commercial paper borrowing, while Denmark has chosen to increase its overall funding programme.

Despite current market turbulence, Kommuninvest, the funding body for Swedish local governments, still plans to press on with its debut euro green bond when volatility abates, according to its head of debt management.

EU supervisors plan to ease the regulatory pressures on banks during the Covid-19 pandemic, allowing them to temporarily breach capital and liquidity buffers to carry on lending to the real economy.

The recent fall in the price of oil is having a knock-on effect on non-core currency issuance. While oil dependent markets could take a hit as their currencies weaken, some net importers could benefit from a stronger currency and safe haven flows.

Danish pharmaceuticals company Bavarian Nordic has announced an Nkr2.8bn (€378m) rights issue to fund its acquisition of GlaxoSmithKline’s commercial and manufacturing rights to Rabipur, a treatment for rabies, and Encepur, a vaccine against tick-borne encephalitis.

Shares in Norwegian Air Shuttle, the Norwegian airline, fell more than 25% on Friday morning after the company scrapped its profit guidance for 2020 because of the mounting economic damage caused by the spread of the Covid-19 coronavirus.

Vattenfall, the Swedish state power company, issued its second green bond on Thursday, to an enthusiastic reception from investors, who drove the €500m note’s pricing very close to the issuer’s curve.

It was a mixed picture in the dollar public sector bond market on Thursday. A Norwegian agency was able to tighten the spread of its five year fixed rate trade on the back of a well subscribed order book. But a supranational was not able to achieve the same momentum for an intraday three year Sofr-linked floating rate note.

Eika Boligkreditt this week placed the most deeply negative yielding non-German covered bond since credit market volatility spiked two weeks ago. The deal, issued on Thursday, will help participants gauge just how far spreads have moved, setting the market up for more active issuance in March when demand is expected to materialise on the back of a considerable widening in the Bund/swap spread.

Danske Bank confirmed on Monday that it would be redeeming one of its additional tier ones next month, after erroneously stating that it was withdrawing a notice to call the bonds.

The first scorecard of 2020 looks at the progress Nordic agencies have made in their funding programmes at the start of March.