Nykredit to auction 160 billion crowns of bonds

Published 10/07/2010, 06:42 AM
Updated 10/07/2010, 06:48 AM

COPENHAGEN, Oct 7 (Reuters) - Danish mortgage lender Nykredit is to offer 160 billion Danish crowns ($30 billion) of mortgage bonds and other covered bonds at auctions from Nov. 26 through Dec. 13.

The auctions, a large part of the annual rollover of housing finance in Denmark, are conducted to refinance adjustable-rate mortgage loans (ARMs) and Cibor/Euribor-based loans, Nykredit said on Thursday.

Nykredit expected to sell 81 billion worth of Danish crown-denominated ARMs, 44 billion worth of euro-demoninated ARMs and 35 billion worth of floating-rate bonds. The main part will consist of one-year covered bonds, it said.

Nykredit said it would hold auctions on Nov. 26, and Dec. 2, 3, 6, 7 and 13.

"As in previous years, the auction amounts for the refinancing will be affected by prepayments and refinancing changes," Nykredit said, adding expected auction amounts will be published from the beginning of November.

Foundation-owned Nykredit is Denmark's biggest issuer of mortgage-backed securities with about 40 percent of the market, followed by Danske Bank's Realkredit.

Denmark has the world's third-biggest mortgage bond market after the United States and Germany, and interest rates are reset through annual auctions of one-year, three-year and five-year adjustable-rate loans. The notes tend to be bought by banks, pension funds and other fixed-income investors. (Reporting by Anna Ringstrom; Editing by Dan Lalor) ($1 = 5.330 Danish crowns)

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