Sweden’s Skandiabanken looks set to begin issuing covered bonds under Swedish legislation and backed by Swedish and Norwegian assets, after Moody’s yesterday (Thursday) assigned triple-A ratings to two programmes of the Skandia subsidiary.

Skandiabanken AB is an internet-based bank that operates in Sweden and Norway. It is a 100% subsidiary of the financial services group Skandia.

According to Moody’s, the bank will be selling covered bonds under Swedish legislation, but will have two separate cover pools, one backed by Swedish residential mortgages and one by Norwegian residential mortgages.

The rating agency assigned the two programmes Aaa ratings. Skandiabanken has an A3 deposit rating, on stable outlook, from Moody’s.

The value of assets in the Swedish cover pools is around Skr10bn (Eu1.14bn), comprising 7,648 loans, according to Moody’s, while the Norwegian cover pool comprises 8,590 loans totalling around Nkr10bn (Eu1.25bn, Skr10.9bn).

The collateral score for the Swedish programme is 5.9% and for the Norwegian programme 5%. Each programme has a Timely Payment Indicator (TPI) of Probable-High.

Skandiabanken did not respond to enquiries by the The CBR’s deadline.