Norway

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.

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.