Nordic Bond Deals Soar as Nasdaq Reveals Record Debt Listings

Updated on
  • Nasdaq says 2017 set a new record in volume of corporate bonds
  • Green securities saw the biggest surge, with issuance doubling

In Europe’s northern tip, corporate bond issuance is heating up.

The volume of securities listed on Nasdaq’s Nordic bond platform climbed 10 percent to hit a record 74 billion euros ($90 billion) last year, according to the exchange. Bond managers say this year may well be better.

Oyvind Hamre, a portfolio co-manager who oversees 800 million euros ($971 million) at Pareto Asset Management in Oslo, says the corporate bond market is picking up as banks cut back on lending. “That’s what we’re seeing in the Nordics, with an increasing diversity of corporates coming to the market that traditionally have been more bank funded.”

The combination of record low (even negative) interest rates anchoring market borrowing costs, and heavier bank capital requirements making traditional lending more expensive is driving the shift.

Record Volume

Outstanding volume corporate bonds Nasdaq Stockholm

Nasdaq Nordic

While banks are doing less lending, they’re arranging more deals. Nordea Bank AB, the region’s only global systemically important bank, boosted its share of managed deals last year to 12.8 percent. (Nordea reported a slight decline in lending, in local currencies, in the third quarter. It reports fourth-quarter results Jan. 25.)

More than 300 new bonds were listed on the main market last year, bringing the total number to 1,336, according to Nasdaq. The largest issuers were financial institutions, with Swedish mortgage lender Landshypotek Bank leading with 4.7 billion euros in sales.

On The Rise

The supply of bonds has increased by 11% between 2016 and 2017

Nasdaq Nordic

Green bonds are growing in popularity. The number of listed securities roughly doubled in 2017 to 69. To meet demand, Nasdaq Nordic is opening a new venue, the First North Sustainable Bond Market.

Sustainability Is Trendy

Outstanding volume sustainable bonds Nasdaq Stockholm

Nasdaq Nordic

“We hope that issuers will gain access to a wider pool of investors, while we at the same time are meeting an increased demand for green bonds among market participants,” Ann-Charlotte Eliasson, head of Nordic fixed income listings at Nasdaq, said in a statement.

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