Sweden

Swedbank Mortgage will today (Monday) price a seven year covered bond at the tight end of guidance of the 60bp over mid-swaps area. The deal marks the beginning of what looks set to be a busy week in the covered bond market as other issuers have rushed to secure their place in a line-up that is already four institutions deep.

Swedbank Mortgage is planning to launch a seven year benchmark covered bond next week, with market participants suggesting that the deal could come at a wider level than was expected earlier this week.

The Swedish government has issued a draft law that contains amendments to the country’s covered bond legislation that would allow a cover pool administrator to enter into third party refinancing. The change is aimed at achieving a more favourable assessment of Swedish covered bonds under Standard & Poor’s new rating methodology.

Swedish Covered Bond Corporation took advantage of limited supply in the primary market this week, with many other issuers in blackout periods, to price a Eu1bn five year issue that extended its outstanding benchmark curve and coincides with a Eu1bn jumbo redemption next Monday (1 February).

Swedish Covered Bond Corporation is preparing to price at the tight end of revised guidance a Eu1bn five year issue that was more than twice subscribed, while CIBC met strong demand for the first benchmark covered bond aimed at US investors in two-and-a-half years.

GCE Covered Bonds has closed the order books for a three year benchmark that will be priced at the tight end of revised guidance later today (Tuesday). Swedish Covered Bond Corporation could be the next issuer to follow, having announced a mandate for a five year deal.

Aareal Bank was first into the covered bond market this (Monday) morning, opening books on a Eu500m five year mortgage Pfandbrief. Meanwhile, Groupe Caisse d’Epargne is building a shadow order book for its first benchmark since September 2008 and a handful of other issuers have announced mandates.

Swedbank Mortgage this week became the first issuer to price a three year benchmark covered bond this year, before two other deals followed quickly in the same maturity. The issuer told The Cover that it wanted to distinguish itself from the longer dated issuance that had dominated supply so far.

Three issuers announced mandates this (Monday) morning, ensuring that the pipeline remains bulging even after three issuers closed books on new issues, as the pace of supply showed no sign of relenting in the second week of the new year.

Next week promises to be as busy as this week’s record opening to a year, with two more issuers having officially announced plans for benchmarks in the past 24 hours on top of three outstanding mandates. Supply of Eu5.5bn yesterday (Thursday) took the week’s total to Eu10.25bn from seven deals, just short of the eight totalling Eu11bn in the busiest ever week for the covered bond market at the end of September.

With four new jumbos hitting the market this (Thursday) morning, the number of benchmark issues this week is second only to the last week of September. However, investors have expressed disappointment about what they called expensive spread levels.

Swedbank is guaranteeing covered bonds issued by Swedbank Mortgage as part of a “general, unconditional and irrevocable” guarantee of the issuer to maintain the mortgage bank’s A2 rating from Moody’s, which was affirmed today (Friday).