Swedish gross issuance likely to range between 350-425 bn SEK in 2016

Swedish gross issuance in 2015 amounted to 387bn SEK as the relationship between Swedish covered and credit spreads was not stable due to more lending and higher long-term rates that resulted the covered to underperform. Covered losses might have been limited if the stock market priced a higher probability for cyclical slowdown thus lowering bond yields.

The weak stock markets reflect worries about the global business cycle and the same is also reflected in the credit market. The Swedish covered bond market has trended with the credit markets indicating a current upward risk to covered bond spreads.

"Gross issuance 2015 amounted to 387bn SEK. We believe gross issuance 2016 will be in the range 350-425 bn SEK" - Nordea Bank