Norway

Volatility can produce both investor conservatism and opportunities for new, sometimes brave, issuers. The contrasting fortunes of Norway’s banks’ debut covered bond issues before and after the crisis have shown the importance of timing. Japan and Italy, meanwhile, appear to have time on their side.

Sparebank 1 Boligkreditt has priced its second covered bond, a Eu1bn long three year priced at 8bp over mid-swaps this afternoon. The Norwegian issuer was reported to be pleased with the balance of funding and pricing it had achieved in successfully placing its mortgage backed bond after a period dominated by public sector deals.

Norway’s Sparebank 1 Boligkreditt has returned to the market today with a long three year benchmark sized deal. Coming after a period dominated by German sector Pfandbriefe, the deal is a further vote of confidence in the Norwegian issuer after it reopened the primary market in September 2007 with its inaugural deal.

With German public sector issuers returning in style this week, mortgage Pfandbrief and Scandinavian issuers are being tipped as likely successors in a market where the well stocked pipeline is as much a list of those that can’t access the market as a guide to who will be next. Indeed the problem for the primary market is that it looks like those that could issue won’t, and those that would issue can’t.

DnB Nor Boligkreditt will soon be joining the throng of international issuers touting registered covered bonds to German investors. However, the Norwegian issuer is already enjoying an embarrassment of riches in the private placement market after selling its Eu2bn five year benchmark in mid-January.

BN Boligkreditt bowed to the inevitable late yesterday (Monday) and took the decision to postpone its first covered bond, a planned Eu1bn five year issue with guidance of the 15bp area over mid-swaps, after the covered bond market was hit by the shockwaves set off by yesterday’s sell-off in equities.

Like other issuers to have tapped the covered bond market so far this year, DnB Nor paid up to access the market last week, but Thor Tellefsen, senior vice president of investor relations and long term funding at DnB Nor, told The Cover today that the price was worth paying.

BN Boligkreditt has opened the books on its debut Eu1bn five year covered bond and by lunchtime had attracted some Eu600m of orders at guidance of the 15bp over mid-swaps area, with volatile equity markets providing an unhelpful backdrop.

DnB Nor brought the second week of the covered bond year to a successful close today, pricing its five year deal in the middle of the 11bp over mid-swaps area guidance and at a size of Eu2bn. But whether next week’s supply will match the Eu8bn plus of the past few days remains unclear.

The books have opened on DnB Nor Boligkreditt’s five year benchmark covered bond, and the deal’s swift progress has further demonstrated the divisions in the market, which is in particular benefiting established names.

DnB Nor Boligkreditt is the latest covered bond issuer to join the pipeline and could tap the market imminently, despite supply being as busy as anyone can remember and pricing expectations being constantly revised. The effects of Banco Espiríto Santo’s Eu1.25bn three year coming at a wider than expected 20bp over mid-swaps are still being felt around the market.

BN Boligkreditt is to launch its debut euro covered bond, backed by Norwegian residential mortgages, in the new year. The Norwegian issuer is keen to build a long-term presence in the covered bond market to diversify its funding base, but plans to adopt a measured approach.