Sweden

US dollar denominated covered bond issuance is set for growth, as demand is far outpacing supply, regardless of whether a US law is put a law in place, and European issuers are lining up deals for launch. Funding executives from many institutions explained their strategies at the 3rd Euromoney US Covered Bond Investor Forum on Wednesday this week.

Though primary market activity remains muted, the pipeline continues to grow despite headline risk. A string of mandates for US dollar deals are expected, along with a sterling transaction from Barclays.

Swedbank Mortgage Bank on Friday launched a Eu1bn five year deal which had been postponed the previous week. Though this delay probably benefitted the issuer, some players seemed to think this was not the best execution.

Two Swedish transactions appear to have gone smoothly, underscoring in one syndicate banker’s view the “safe haven bid for anything Scandinavian”.

After the flurry of four deals that priced yesterday afternoon (See separate comments), the market has gone into radio silence.

Primary issuance continues to power ahead with five deals pricing yesterday and a further five deals expected to price this afternoon. Several more have been announced but, in a possible sign of things to come, two have been postponed and there is speculation that another is struggling.

Swedbank Mortgage priced its fourth euro benchmark covered bond of the year on Tuesday, a Eu1bn long three year deal that the issuer told The Cover was motivated in part by publication of robust third quarter figures.

Banca Popolare di Milano, Kutxa and Swedbank Mortgage accessed the benchmark covered bond market this (Tuesday) morning to offer investors a medley of new euro issues after a day of preparation yesterday that one syndicate banker said was necessitated by limited liquidity in the market.

Swedbank Mortgage and Banca Popolare di Milano are lining up new issues that will probably be executed tomorrow (Tuesday), after syndicate bankers said the market opened strongly today.

Two inaugural euro covered bonds backed by residential mortgage backed securities were this (Monday) being flagged for possible launch this week.

The covered bond market is in good condition and generally open for issuance, syndicate bankers reported today (Monday), but with no new mandates publicly announced since last Thursday a deal from Italy’s Intesa Sanpaolo was this morning the most concrete new issue project in the pipeline for the week.

Standard & Poor’s yesterday (Wednesday) affirmed at AAA mortgage backed covered bonds issued by Sweden’s Länsförsäkringar Hypotek under its revised rating methodology.