Sbanken Boligkreditt plans to issue a debut Eu500m covered bond in the first half of 2018 and intends to return once per year, to support planned growth, also potentially issuing private placements in other foreign currencies, the Norwegian issuer’s head of treasury told The CBR.

In its third quarter results, published on 1 November, Sbanken Boligkreditt – formerly Skandiabanken Boligkreditt – said it will use a recently established Eu5bn EMTN programme to obtain long term funding through covered bond issuance. It said the programme “is expected to ensure quick and efficient access to the European capital markets”.

Øyvind Telle, head of treasury at Sbanken, told The CBR that the issuer intends to launch one Eu500m no-grow covered bond per year. He said Sbanken is entering the euro market to diversify its investor base and in response to growth in its mortgage lending.

Telle added that the issuer plans to increase its loan book by 10% per year in the coming years, and said euro covered bond issuance would support this.

He said Sbanken could also issue in other currencies using the programme, giving the example of Swedish krona issuance, but said any such deals would take the form of private placements.

The specialist covered bond issuer is a subsidiary of what was previously the Norwegian branch of Skandiabanken, part of the Swedish Skandia group. As a spin-off from Skandiabanken’s main Swedish business, it was established as a standalone bank in October 2015 and on 6 November it was renamed Sbanken.

Skandiabanken had previously been active in both the Norwegian krone and Swedish krona covered bond markets, issuing debuts in both currencies in late 2013. Following the spin-off of the Norwegian operations, the then-Skandiabanken set up a Norwegian covered bond programme. Existing Norwegian krone-denominated covered bonds of the Swedish entity were converted into obligations of the new Norwegian issuer. Swedish krona covered bonds remained with the Swedish entity.

As of the end of September, Sbanken Boligkreditt had Nkr24bn covered bonds outstanding, of which Nkr1.5bn was issued in the third quarter.

Sbanken’s covered bonds are rated Aaa by Moody’s.

Picture: Sbanken/YouTube