Norway

The dollar market continued to sustain covered bonds on Wednesday as DNB mandated leads for a five year, a day after ANZ issued $1.25bn in the same tenor. The Australian bank got better execution than would have been achieved in euros and could have priced even tighter. The excellent result is testimony to the issuer’s long absence and to the depth of demand evident across the dollar fixed income market.

Sparebanken Vest Boligkreditt priced the first Norwegian covered bond of 2015 flat to its existing curve on Wednesday. The deal illustrates that rare issuers from core regions are still able to get superb execution despite the more skittish tone in credit markets lately.

The covered bond primary market is expected to maintain momentum on Wednesday as books for the first deal from Norway and the third from Belgium are expected to open.

Van Lanschot Bankiers is expected to open books on Tuesday for its inaugural conditional pass through covered bond. The first Norwegian deal of the year could be announced soon. Meanwhile Berlin Hyp is on the road with its Green covered bond.

DNB Boligkreditt has stepped in to take advantage of demand in five year sterling floaters identified last week when JP Morgan issued a senior unsecured deal. On Monday, the Norwegian bank was set to become the first issuer this year to extend the sterling FRN covered bond curve to five years, with all other deals this year opting for three year tenor.

For the first time the European Central Bank waded into the primary market to buy covered bonds for its third purchase programme (CBPP3) this week, as eurozone issuers from the currency bloc’s core and periphery returned after a long hiatus. The central bank’s buying may not be so good for core issuers but the evidence so far suggests peripheral names who have been locked out are about to bask in its largesse.

DNB Boligkreditt returned to the euro covered bond market on Monday to issue its first deal of the year. The transaction looked set to price comfortably through mid-swaps, but it did not enjoy the same degree of price tension as recently issued and highly rated core covered bonds that are likely to be included in the European Central Bank’s third purchase programme (CBPP3).

Nordea Eiendomskreditt has priced its first sterling covered bond backed by Norwegian residential loans. The £500m three year floater appealed to investors on a number of counts and provided competitive funding for the issuer.

The Norwegian Ministry of Finance on Tuesday defined what it considers a systemically important financial institutions, and said they should hold 2% more common equity tier 1 (CET1) than other Norwegian banks.

Covered bonds are finishing the week tighter with demand spurred after Bunds softened, allowing investors to hit absolute yield targets. Traders reported investors looking to extend maturities, though selective sales of long-dated Norwegian bonds have raised speculation of primary activity next week. Core to peripheral convergence is still broadly evident especially in Ireland, but signs of fatigue have become evident in long dated multi-Cédulas and selective short-dated single name Cédulas.

Eika Boligkreditt opened books on Wednesday for a €500m seven year covered bond that offered a spread not seen from Norway since January 2013, and one of the largest pick-ups from a core European issuer this year. But with a new issue premium of just 2bp, the funding was cheap for the borrower.

Norway’s Vardia Insurance Group on Thursday announced its plans to float on the Oslo Stock Exchange next month.