Nordics

After a string of very successful 10 year covered bond trades, it was clear that seven and five year deals would “fly like hell,” said a syndicate manager on one of the deals issued on Tuesday by Swedbank and Aareal Bank.

Investors are returning to the covered bond, sovereign and supranational agency (SSA) markets in their droves. Despite exceptionally heavy issuance, the startling breadth and depth of demand seen in many deals this week caught market participants off guard — not least the investors themselves. Bill Thornhill reports.

Fearful of missing out and in the absence of competing credit supply, investors piled into higher yielding covered bonds offered by Canadian, Australian and Swedish issuers this week. A negative new issue premium Royal Bank of Canada’s five year epitomised the state of investor frenzy.

Four covered bond issuers returned to the market on Wednesday and, in contrast to the start of the year when concessions were 5bp-7bp, none paid more than 2bp.

SCBC chose to issue its first green covered bond in its home currency this week, saving itself a few basis points compared with euros — where a green covered bond is now considered 'feasible'.

Fearful of missing out and, in the absence of competing credit supply, investors piled into six covered bonds on Tuesday with a combined value of more than €6bn.Royal Bank of Canada’s deal epitomised the state of investor frenzy as it was able to issue the largest deal of the year with a negative new issue premium.

Banca Monte Dei Paschi di Siena (MPS), Fédération des caisses Desjardins du Québec (FCDQ), SpareBank 1 Boligkreditt (Spabol) and DZ Bank have announced plans to issue covered bond benchmarks on Wednesday when the market is expected to be just as busy as it was on Tuesday.

Leveraged finance markets in Europe are looking up, and bankers expect they may even see some deals priced before long.

Dollar SSA issuance picked up in earnest this week after a slower than usual start to the year, with a rich variety of borrowers printing deals, some in record size or with record books. Conditions are such that SSA bankers are confident supply will keep coming and demand stay high for the next few weeks — cheering news for one sovereign issuer looking to make a comeback in the currency.

Guarantor: Swedish local government members

Public sector borrowers printed over $10bn of bonds on Tuesday in a dollar market that SSA bankers expect to keep its momentum in the weeks ahead.

SEB has selected a new head of equity capital markets following Artem Kosenko’s move across to debt capital markets.