Real estate issuers that saturated Swedish market turn to ECB

After dominating Sweden’s credit market, real estate issuers in the Nordic country are now turning to the euro zone to find buyers with deeper pockets, including the European Central Bank.

Niklas Edman, a portfolio manager at Carnegie Fonder in Stockholm. | Photo: Carnegie Fonder

Last week started with another Swedish real estate firm issuing in euros instead of kronor, and SBB is now one of a handful in the sector to have raised debt in Europe’s single currency in the past four weeks. What’s more, Swedish issuers are increasingly using their Finnish and Dutch units to be eligible for ECB bond purchases.

Sweden’s credit market made headlines last year as investors, the Riksbank and the financial watchdog warned of low transparency and dodgy liquidity. Critics also point to an over-representation of real estate debt, which now makes up more than 40 percent of the entire krona-bond issuance market.

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