Norway

Three issuers announced mandates this (Monday) morning, ensuring that the pipeline remains bulging even after three issuers closed books on new issues, as the pace of supply showed no sign of relenting in the second week of the new year.

Next week promises to be as busy as this week’s record opening to a year, with two more issuers having officially announced plans for benchmarks in the past 24 hours on top of three outstanding mandates. Supply of Eu5.5bn yesterday (Thursday) took the week’s total to Eu10.25bn from seven deals, just short of the eight totalling Eu11bn in the busiest ever week for the covered bond market at the end of September.

Fitch on 22 December affirmed the AAA rating of DnB Nor Boligkreditt’s covered bonds and gave them an improved Discontinuity Factor after the Norwegian issuer extended the liquidity gap management period for its hard bullet bonds from six to 12 months.

Standard & Poor’s today (Friday) downgraded DnB Nor’s long term counterparty credit rating from AA- to A+, on stable outlook, because of “sharply” deteriorating asset quality this year.

Terra Boligkreditt has sold a Nkr1bn (Eu118m) 10 year covered bond after a rise in yields enabled the issuer to offer a 5% coupon attractive to investors.

Two new Norwegian mortgage institutions have issued covered bonds backed solely by commercial mortgages, The Cover understands.

Norges Bank and Moody’s this week mentioned the positive effects the growth in covered bond funding is having in Norway, but also noted possible negative side-effects of the trend.

A group of small Norwegian banks has set up a mortgage credit institution, Verd Boligkreditt, for the joint issuance of covered bonds. It will be run on their behalf by Sparebanken Vest, which also has its own covered bond vehicle.

SpareBank 1 Boligkreditt priced the first Norwegian jumbo since September 2008 yesterday (Tuesday) afternoon, a Eu1bn three year deal that the issuer told The Cover made good on its commitment to benchmark covered bond issuance every year.

New issues from Spain and Norway launched this (Tuesday) morning after UBS’s second benchmark covered bond yesterday (Monday) are making this week busier than most market participants had been expecting.

UBS is set to price only its second covered bond, after having built an oversubscribed order book this (Monday) morning for a 10 year follow-up to its five year debut of September. And the first Norwegian euro benchmark of the year is expected tomorrow (Tuesday).

Swedish Covered Bond Corp sold a Nkr600m (Eu72m/Skr738m) deal yesterday (Tuesday), with investors seeking foreign covered bonds given the lack of domestic supply.