Sweden

Demand for Nordea Hypotek’s three year new issue had reached Eu1.5bn by midday today (Thursday) after Barclays Capital, Natixis, Nordea and UniCredit opened books with guidance of the 2bp over mid-swaps area this morning. But the level of demand and the price that Nordea paid has led some market participants to ask why the issuer is visiting the euro market.

SEB is set to swim against the tide of domestic opinion with the launch of its inaugural euro denominated covered bond in mid-November. Other Swedish issuers have favoured the strong domestic market over the new pricing levels in euros, but SEB is expecting euro spreads to tighten between now and mid-November.

Swedish bank SEB is to issue its debut euro covered bond.

Thomas Ahman, head of funding and liquidity at Stadshypotek in Stockholm, stressed today (Wednesday) that the issuer is in no hurry to tap the euro market and has stepped up its activity domestically.

In the UniCredit* Nordic covered bond roundtable participants discussed the boom in euro issuance from the region, and what differences and similarities there are between issuers and markets.

While Nordic issuers have not been able to completely avoid the recent turmoil in the covered bond market, their credit quality and relative scarcity have served them well, and investors’ enthusiasm for their paper has enabled them to achieve funding levels as good as, if not better than, expected.

With the key Norwegian piece slotting into place next to Sweden and Finland, all that is needed is Denmark to complete the Nordic covered bond jigsaw. Bankers say that the region may also emerge as a test-bed for the next generation of products in terms of geographical diversification, such as multi-jurisdictional deals with mortgages in the cover pool drawn from a number of countries. Philip Moore reports.