Danish Top-Rated Mortgage Debt Draws Investors

Record foreign demand at Denmark’s $97 billion mortgage-bond auction helped send yields to all-time lows as investors seeking an escape from debt-plagued peripheral Europe sought refuge in the top-rated Danish securities.

Denmark’s $490 billion mortgage-bond market, the third-largest after the U.S. and Germany, proved resilient during the financial crisis. Prices rose 6.6 percent in 2008, 7.1 percent in 2009 and 4.6 percent this year, the Danske Bank Mortgage Bond-Market Index shows. The December auction of adjustable-rate notes is attracting demand as sovereign debt from a number of euro members is beleaguered by ratings downgrades. Fitch Ratings on Dec. 9 cut Ireland’s debt three levels to BBB+. Moody’s Investors Service has rated Greece junk since June.