Sweden

Swedbank Hypotek issued a two year Swiss franc mortgage backed covered bond yesterday (Wednesday).

Covered bonds are edging their way back into the Swiss franc market. As well as an appearance from Pfandbriefbank schweizerischer Hypothekarinstitute, Landesbank Baden-Württemberg sold a public sector Pfandbrief this week and Swedbank is bookbuilding for a mortgage-backed covered bond.

Swedbank Mortgage on Friday priced a Eu1.25bn five year jumbo at 130bp over mid-swaps and while the pricing it got could have been better, the issuer told The Cover, it was a price worth paying.

Swedbank Mortgage will this (Friday) afternoon price the first Swedish jumbo since the European Central Bank’s announcement three weeks ago, a Eu1.25bn five year mortgage-backed benchmark. And a further issue from non-euro Scandinavia could be on the horizon.

Moody's yesterday (Monday) placed on review for possible downgrade Swedbank’s long term debt rating and the senior rating of Swedbank Mortgage.

Fitch yesterday (Thursday) downgraded two western European covered bond issuers after a review of European banks’ exposures to eastern Europe and the Commonwealth of Independent States (CIS).

Moody's last Thursday placed on review for possible downgrade the mortgage and public sector Pfandbriefe issued by SEB AG.

Moody’s this (Tuesday) morning cut the rating of Skandinaviska Enskilda Banken AB from Aa2 to A1 and that of its German subsidiary, SEB AG, from A1 to Baa1, and left them both on negative outlook.

The Swedish government yesterday (Thursday) revised its guarantee programme for bank debt to encourage banks to raise more long term funding. Unsecured bank debt can now be guaranteed in maturities out to five years, making it look even more unlikely that Swedish banks will take up the option of issuing guaranteed covered bonds, which was already available for maturities of up to five years.

Standard & Poor’s yesterday (Tuesday) revised the outlook on Skandinaviska Enskilda Banken’s A rating from stable to negative.

Skandinaviska Enskilda Banken confirmed the growing recovery of the jumbo covered bond market yesterday (Tuesday), pricing the first Scandinavian benchmark in six months. And the issuer suggested that others who do not pay the spreads now necessary to tap the market are deluded.

Skandinaviska Enskilda Banken is due to price a Eu1bn five year mortgage-backed benchmark later today (Tuesday). Market participants have been encouraged to see a jumbo from a new jurisdiction and were today working out just what the implications of the deal are for other potential issuers.