Sweden

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.

Skandinaviska Enskilda Banken is today (Monday) tapping the market with a five year benchmark covered bond, the first in six months for an issuer away from France and Germany.

Skandinaviska Enskilda Banken is today (Friday) testing the market for a new benchmark covered bond, The Cover understands.

Aareal’s debut SoFFin-backed issue has been the highlight of government-guaranteed supply this week, while BNP Paribas is today (Wednesday) adding momentum to a reopening of the unguaranteed senior bank market.

Moody’s downgraded Swedbank’s senior unsecured debt from Aa3 to A1 with a negative outlook this (Friday) morning.

Standard & Poor's and Moody’s have delivered verdicts on Skandinaviska Enskilda Banken with rating actions.

Activity in the euro government guaranteed bank debt market has picked up since Monday’s Swedbank issue, but only moderately. And despite an improvement in market sentiment, covered bond banks are keeping investors waiting for a follow-up to last week’s jumbo from Crédit Agricole.