BRFkredit, Nordea Kredit and Realkredit Danmark finished the latest round of sales to refinance ARM bonds on Friday, with analysts noting that spreads were the lowest since before the crisis and that Nordea achieved the lowest absolute yield ever at an auction.

BRFkredit, Nordea and Realkredit Danmark (RD) concluded their sales two days after DLR Kredit and Nykredit Realkredit finished their November auctions. DLR Kredit starts December auctions tomorrow (Tuesday), but is offering only a small amount of bonds.

Nordea offered Dkr35bn (Eu4.67bn) of one year Danish krone denominated one year adjustable rate mortgage (ARM) bonds at its latest auctions, and RD sold Dkr50bn. BRFkredit expected to offer Dkr30.6bn of one year covered and mortgage bonds.

Uffe Kalmar Hansen, senior covered bond analyst at Nordea Markets, said that the spreads achieved at the latest refinancing auctions were the lowest since before the crisis. The absolute yield on one year ARM bonds offered by Nordea was 0.13% across the five days of auctions, the lowest yield ever at an auction, according to Hansen.

“Everyone seems to be extremely satisfied,” he added.

The decision by some borrowers to take out new Cita-based loan products as opposed to continuing with bullet ARM bonds had a positive impact on the auctions by reducing the supply of bonds while demand remained strong, added Hansen.

At RD’s auctions the average spread over Cita on one year ARMs was 6.2bp, according to Jan Østergaard, senior analyst at Danske Bank Markets. The auctions started at a spread of around 8bp over Cita before tightening to around 5bp over and then widening to 6.8bp in the last two days of the auctions, he said.

“It was very tight compared with previous auctions and there was very high demand,” he added.

The levels are considerably tighter – by some 10bp – than those at which the bonds had been trading in the market before the auctions, according to Østergaard.

“We have seen these levels against swaps before, but not against Cita,” he said. “The levels were also very tight versus government bonds.”

The spread on one year ARMs versus govvies was around 19bp over.

The results of BRFkredit’s sales were not available at the time of publication.