Norway

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.

Moody’s yesterday (Monday) downgraded Terra Boligkreditt’s covered bonds from Aaa to Aa2 and placed them on review for further downgrade.

DnB Nor is setting up a new institution to issue covered bonds backed by commercial mortgages, while DnB Nor Boligkreditt will continue to focus purely on residential mortgage-backed issuance.