Sweden

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).

Swedish Covered Bond Corp sold a Nkr600m (Eu72m/Skr738m) deal yesterday (Tuesday), with investors seeking foreign covered bonds given the lack of domestic supply.

Swedish Covered Bond Corp yesterday (Tuesday) issued a Sfr275m June 2016 deal in a rare appearance in the Swiss franc market, which was also the first public covered bond for a foreign issuer in the currency for four weeks.

A proposed amendment to Sweden’s covered bond law that sets out the options available to an administrator to obtain liquidity in the event of an issuer’s insolvency is a positive addition to the law, but will not, on its own, lead to an improved liquidity gap assessment under Fitch’s methodology, the rating agency said yesterday (Monday).

A Eu1bn five year cédulas hipotecarias for Banco Bilbao Vizcaya Argentaria priced at the wide end of guidance could signal a welcome leveling of the balance of power between investors and issuers in the covered bond market, according to one banker this (Wednesday) morning. Meanwhile Danske is in the market with a new issue, National Bank of Greece has completed the first Greek benchmark, and we include here a wrap-up of some distribution statistics from earlier in the week. [Updated to correct BBVA pricing.]

UBS made an impressive debut in the covered bond market this (Monday) morning, gathering over Eu7bn of orders. Unicaja also got off to a strong start in the asset class with its inaugural issue, while Swedbank Mortgage will price a larger than expected deal, even if bookbuilding was the slowest of the morning’s deals.

Covered bonds made a comeback in the Swiss franc market this week, as investors reached for a highly rated asset class that, unlike other triple-A product, still offers a spread above mid-swaps.

Stadshypotek yesterday (Thursday) priced a Eu1.5bn five year covered bond, the first new issue launched since the European Central Bank’s purchase programme started that is not eligible for the scheme. But the issuer’s strong credit and cover pool gave it confidence that this would not be a worry for the transaction, it told The Cover. And the Swedish deal already has a successor, with Swedbank Mortgage lined up to launch a seven year issue early next week.

Stadshypotek this (Thursday) morning reopened the Swedish covered bond segment with a five year benchmark, while Caja Madrid will this afternoon price its first issue of the year, a Eu1.75bn seven year cédulas hipotecarias. Meanwhile, UBS has announced the mandate for its debut.

Moody’s yesterday (Tuesday) downgraded several Scandinavian financial institutions that either issue covered bonds or are closely linked to issuers, concluding reviews for possible downgrade that were initiated on 22 July.