Sweden
Investors are starting to worry that the Riksbank’s purchases of covered bonds are fanning a housing market that’s already red hot, Bloomberg News reported. Owen Winrow, who helps manage 195 billion kronor ($24 billion) at Afa Forsakring, says his concern is that “with a housing market on fire,” the Riksbank “might be playing a dangerous game.” Winrow also notes that the Riksbank has probably reached the limit of what it can do with its quantitative easing program for government bonds, “so there isn’t too much choice, I guess, than buying covered” bonds, he said.
Sweden’s Handelsbanken reported a fall in quarterly net earnings on Wednesday due to restructuring costs, though the bank’s loan portfolio continued to weather the impact of the coronavirus pandemic with ease, Reuters reported. Handelsbanken said in its report that results had been impacted by a provision for a restructuring reserve of 1.47 billion crowns referring to the branch closure and IT investment programme the bank unveiled in September.
Scandinavian carrier SAS AB has secured enough backing from bondholders for a debt-to-equity plan that it says is needed to stave off bankruptcy, Bloomberg News reported. At a crunch meeting in Stockholm on Wednesday, an overwhelming majority of creditors voted in favor of the proposals to convert their holdings into equity and new notes, according to Lars Lonnquist, a portfolio manager at Spiltan Fonder AB and acting chairman of a committee of SAS noteholders.
Scandinavian budget carrier Norwegian’s Swedish division has been denied a credit guarantee by the Swedish national debt office, FlightGlobal reported. The office states that it has “decided to reject” the application because guarantees can only be granted to airlines considered financially viable on 31 December 2019. It says there was a “very high risk” at the time – even before the air transport downturn – that Norwegian would not be able to meet its financial obligations, and that it would not be able to manage further debt.