Ålandsbanken made its covered bond debut with a Eu200m dual tranche issue yesterday (Wednesday), and its group treasurer said it is pleased to have tapped the market after a lengthy lead-up, while Storebrand Boligkreditt is understood to be assessing the timing for a deal.

Finnish issuer Ålandsbanken sold a Eu100m three year fixed rate covered bond at 55bp over mid-swaps and a Eu100m two year floating rate note at 45bp over six months Euribor. Danske Bank and SEB were lead managers.

“We are very happy that Ålandsbanken was able to print this deal,” said Jacob Truelsen, syndicate official at Danske Bank. “It shows that there are options for smaller mortgage banks to tap the market.”

The covered bonds are backed by Finnish residential mortgages.

Anders Gustafsson, group treasurer at Ålandsbanken, said that the issuer is very pleased to have been able to enter the market.

“It’s been a lengthy process,” he said, “because we didn’t have a rating before and we issued under new Finnish legislation that allows direct issuance off your balance sheet.

“We’re very happy to have finally managed to come out with a deal.”

Ålandsbanken received a licence to issue covered bonds from the Finnish Financial Supervisory Authority (FSA) in July 2011 and finalised a Eu1bn EMTN and covered bond programme late last year. Standard & Poor’s this summer assigned a preliminary rating of AA to the programme.

The issuer aims to tap the market regularly with small deals, added Gustafsson, as the bank is not big enough to sell benchmark-sized transactions.

“Around this size is what we want to do,” he said. “Our main aim is euros, but we may also issue in Swedish kronor, and are open to private placements if the appetite is there.”

The deal follows a brief roadshow in Finland, the bank’s home market, a few weeks ago, said Gustafsson, which also provided most of the investors in the order book, in addition to some German accounts.

The main comparable for pricing was Ålandsbanken’s Finnish peer, Aktia Bank, according to Gustafsson, with Ålandsbanken’s covered bonds as anticipated coming slightly wider on account of the smaller size of the issuer.

Norway’s Storebrand Boligkreditt last Wednesday (29 August) announced a mandate for a Eu250m covered bond, awarded to Commerzbank, Danske Bank and DNB. The Covered Bond Report understands that the issuer received positive feedback on its credit quality and is considering a range of factors, including the cross-currency swap, as part of making a decision on the timing of a possible transaction, which is not thought to be imminent.

Storebrand is a rare covered bond issuer in the euro market and its borrowing is concentrated on covered bond issuance mainly in the Norwegian capital market. As at the end of 2011 the mortgage company had 12,287 mortgages and flexible mortgages equivalent to Nkr16.6bn on its balance sheet, according to a 2011 annual report, and nearly Nkr12bn covered bonds outstanding, of which Nkr5.3bn were issued on the market.

The last Norwegian benchmark euro covered bond was a Eu1bn six year issue for SpareBank 1 Boligkreditt on 20 August.