Rush of savings banks to Nordic ABM

Banking, Markets, News, Stock Markets — By on May 27, 2014 at 9:13 AM

osloSE-photo-1532627/05/2014 – Over the last few days, four savings banks have listed their first fixed income securities on Nordic ABM.

Eidsberg Sparebank, Tolga-Os Sparebank, Tysnes Sparebank and Haltdalen Sparebank have recently listed their first fixed income securities on Nordic ABM. These four banks are all local, independent savings banks, and are members of the Eika Alliance.

The issues listed by these four savings banks are between NOK 30 million and NOK 100 million, with floating interest rates of around 2.6% (three-month NIBOR + margin). DNB is the manager for the issues listed by Eidsberg Sparebank and Tysnes Sparebank, while Haltdalen Sparebank chose Sparebank 1 Markets as its manager and Tolga-Os Sparebank chose Norne Securities.

Nordic ABM is the fastest-growing Nordic marketplace. While similar Nordic marketplaces stand still,  there are now 1023 issues listed on Nordic ABM, which is the alternative marketplace for bonds and certificates operated by Oslo Børs. Nordic ABM passed the milestone of 1, 000 listed issues in April, and so far this year as many as 152 new issues of fixed income securities have been listed on Nordic ABM.

Nordic ABM is a popular source of loan capital for banks and insurance companies, and capital raising by savings banks has played an important role in the rapid growth of Nordic ABM.

Banks and insurance companies make up a major part of the issuers that use Nordic ABM, and together account for 65% of outstanding value of listed bonds and 73% of the number of listed issues. If the category is extended to include covered bonds, which are bonds issued by credit institutions with their underlying residential mortgage loan portfolios as collateral, banking and finance issuers account for 80% of outstanding value.

Oslo Børs operates two marketplaces for listing and trading in fixed-income instruments: Nordic ABM and Oslo Børs. When Nordic ABM was first launched in 2005, the objective was to create an efficient bond market that would also be accessible for smaller companies. The process of admission to listing on Nordic ABM is speedier and less comprehensive than is the case for the Oslo Børs marketplace because issuers do not have to publish an EEA prospectus. In addition, Nordic ABM is aimed at companies that do not prepare their financial statements in accordance with IFRS. The Nordic ABM marketplace is subject to market surveillance in the same way as Oslo Børs, which together with virtually identical trading rules and co ntinuing obligations for issuers ensures high market quality.

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