Norway

In brief: DnB Nor Boligkreditt is expected to be the next issuer into the market and is already building a shadow order book, with launch understood to be imminent.

Norway’s two benchmark covered bond issuers, DnB Nor Boligkreditt and Sparebank 1 Boligkreditt, were on tour in Germany last week doing their best to attract investors’ attention, only to go on to stress their low profile in the market. One of the central messages of the presentations and the dual roadshow, hosted by UniCredit, was to highlight the exclusivity and the high quality of Norwegian jumbos.

Norway’s Storebrand executed its first covered bond issue in its domestic krone market on Friday, selling a Nkr2bn two tranche issue through DnB Nor Markets. The issuer has recently been on the road ahead of its non-jumbo euro debut.

The disarray in the primary market this week has not deterred issuers old and new from pushing on with their covered bond plans. DnB Nor has picked leads for a new benchmark and Banco BPI has announced the arrangers of its programme and scheduled a roadshow.

Terra Boligkreditt priced its first euro transaction yesterday (Thursday), its public non-jumbo deal adding a new dimension to the reopened covered bond market that was being cited as a reasonable option for even larger issuers.

Moody’s cut Alliance & Leicester’s long term credit rating from Aa3 to A1 yesterday (Wednesday), just days after the UK bank launched and retained the first issue from its covered bond programme. Meanwhile, Düsseldorfer Hypothekenbank has laid out its position in light of Fitch’s rating action last Friday.

Norway’s Terra Boligkreditt is launching its first covered bond in euros, adding yet more Norwegian supply to the market. Sweden’s SEB has mandated banks for a new issue, but is expected to hold off until next week.

DnB Nor has kept up the Norwegian theme to the week with a Sfr200m (Eu126m) eight year deal yesterday (Tuesday), making it the first foreign covered bond issuer to tap the Swiss franc market since the Swedish Covered Bond Corp on February 19.

Norway’s Storebrand group is turning to covered bond issuance through Storebrand Kredittforetak AS. Its first issue is expected soon, but, according to Ingunn Gurvin, head of group treasury at Storebrand, the issuer will not be entering the jumbo market for the foreseeable future.

Danske Bank has closed the books for the first euro denominated Danish jumbo covered bond, a two year deal backed by non-Danish mortgages marketed at guidance of the mid-swaps plus 10bp area.

Glitnir has added covered bonds to its funding arsenal to help overcome the volatility that has been threatening Icelandic banks this year, selling Ikr56bn (Eu474m) in two tranches off a Ikr100bn programme.

Norges Bank Investment Management has been telling issuers and other counterparties that reports it is reassessing the position of covered bonds in its portfolio are “rubbish”, saying that the product continues to have the same weighting in its benchmark.