Nordea tees up new Finnish issuer, old routine foreseen
Nordea is expected to launch the first euro benchmark covered bond from its new Finnish issuing entity later this month, having today (Wednesday) announced a roadshow to introduce Nordea Mortgage Bank’s programme to investors ahead of a potential deal with an intermediate to long maturity.
Nordea has previously issued euro-denominated covered bonds through subsidiary Nordea Bank Finland, but earlier this year began establishing a distinct, specialist Finnish covered bond issuer as part of a plan to turn its national subsidiaries into branches of the Swedish parent.
After the demerger of Nordea Bank Finland was completed on 1 October and all assets and liabilities relating to its covered bond business were transferred to the new entity, Nordea indicated to The CBR that Nordea Mortgage Bank could launch its debut in the fourth quarter.
Nordea Mortgage Bank this morning announced a European roadshow “to introduce its newly established Finnish covered bond programme” ahead of a potential euro benchmark issue with an intermediate to long maturity. Deutsche, HSBC, Natixis and Nordea have the mandate.
The roadshow will run from next Monday to Friday (11 November), and a syndicate banker at one of the leads said the deal could be launched as soon as the following week, subject to market conditions.
The programme is backed by 100% Finnish collateral and rated Aaa by Moody’s.
A banker away from the deal suggested that Nordea Mortgage Bank will not have to pay up substantially to enter the market, given the strength of the Nordea name and Nordea Bank Finland’s long history of issuance.
“It’s a very familiar, triple-A name and a well-established jurisdiction,” he said. “There may be a smaller re-entry concession, but I wouldn’t have thought that they’ll have to offer much of a new issuer premium.”
Nordea Bank Finland sold its last benchmark covered bond, a Eu1.25bn 2022 issue, in October 2015. Only one benchmark covered bond has been sold out of Finland this year, a Eu1.25bn seven year for OP Mortgage Bank in May, while the only other public issuance has been a Eu250m five year debut for the Mortgage Society of Finland in May and a Eu250m seven year for Ålandsbanken on 22 September.
