Norway

Moody’s has today (Tuesday) confirmed the Aa2 rating and “high” Timely Payment Indicator assigned to Terra Boligkreditt’s covered bonds after completing a review of whether Terra’s function as a group funding platform could make the cover pool less attractive to a potential purchaser in the event of an issuer default.

Norges Bank is planning to reverse temporary changes to its collateral requirements and tighten them beyond those that existed before they were eased, it announced today (Thursday). From February 2012 the Norwegian central bank will no longer accept bank securities as collateral, but covered bonds will remain eligible.

Moody’s yesterday (Tuesday) downgraded several Scandinavian financial institutions that either issue covered bonds or are closely linked to issuers, concluding reviews for possible downgrade that were initiated on 22 July.

Norwegian internet bank Gjensidige Bank has established a mortgage bank for the issuance of covered bonds, Gjensidige Bank Boligkreditt.

DnB Nor Boligkreditt issued a Nkr1.25bn (Eu145m) five year floating rate covered bond today (Wednesday) that it is not swapping with the central bank.

Nordea Hypotek has issued a Nkr750m (Eu86m) five year covered bond, catering to Norwegian krone investors that need triple-A securities but are struggling to find paper from domestic issuers.

Norway’s Sparebanken Øst has set up a covered bond issuer.

Fana Sparebank has become the twelfth Norwegian bank to set up a covered bond issuer.

Moody’s yesterday (Wednesday) placed on review for possible downgrade the long term ratings of several Nordic covered bond issuers.

Public benchmark covered bond issuance could become more attractive for Norwegian financial institutions after the Norwegian central bank on Wednesday indicated that it could adjust the pricing of a swap agreement introduced in October that gives financial institutions the possibility to swap Norwegian covered bonds for government securities.

Moody’s today (Thursday) cut Storebrand Bank’s rating from A2 to A3, on negative outlook, on lower profitability and a downgrade of its parent, Storebrand ASA, to Baa3.

Sparebank 1 Boligkreditt will be holding a non-deal roadshow next week and the related savings banks are also setting up a new covered bond programme.