Registration of foreign demand 97 billion U.S. dollars of Denmark, the mortgage-bond auction helped the yields of all the minimum times as investors looking for an escape from the debt-ridden periphery of Europe took refuge in the values Danish top-rated.
490 billion U.S. dollars of Denmark mortgage bond market, the third largest after the U.S. and Germany, proved resilient during the financial crisis. Prices rose 6.6 percent in 2008, 7.1 percent in 2009 and 4.6 percent this year, Danske Bank Mortgage Bond Market Index shows. The December auction adjustable rate notes is to attract demand and sovereign debt of a number of members of the euro is plagued by low ratings. Fitch Ratings on December 9, Ireland reduce debt three levels to BBB +. Moody's Investors Service has rated trash Greece since June.
In Copenhagen, based on a Realkredit Danmark A / S, yields one-year notes fell to 1.51 percent from 1.78 percent last year, said Michael Philip Roland Oldorf, an economist at the nation's lender largest second mortgage. three-year yields fell to 2.17 percent from 2.81 percent last year, while the five-year notes yielded 2.80 percent from 3.34 percent last year, he said. In comparison, the German government debt for five years yielded 1.99 percent on 10 December. The auction began Nov. 25 and ended today.
On the last day of the auction, the notes denominated in kroner a year issued by Nykredit A / S, Denmark's largest issuer of debt, was down 1.5 percent, the company said in an e-mail. Three-year yields were at 2.32 percent and five-year yields to 2.97 percent.
'Abundance'
"We have an abundance of liquidity and investors want to buy something safe such as Danish mortgage bonds," said Jens Peter Soerensen, chief analyst at Danske Bank, the father of Realkredit Danmark. "With the European Central Bank on hold, rates have fallen compared to last year."
Denmark's central bank pegs the crown to the euro. Its benchmark interest rate has been at a record low 1.05 percent since January, compared with 1 percent the ECB.
Covered bonds, which are backed by the cash flow of a group of mortgage loans, the poor performance of sovereign debt in Italy, Spain, Greece, Belgium, Portugal and Ireland for maturities of five years.
"There are so many different situations for these two markets now," Soerensen said.
'Book Segura
Investors based outside the Nordic nation could have bought up to 20 percent of mortgage bonds offered since the auction started two weeks ago, a record and up 15 percent last year, according to Danske Bank. The exact ratio of national to foreign investors will not be known until the Central Bank published details of the auction next month.
"The document is very confident that you can repurchase the central bank," said Troels Theill Eriksen, analyst at Nordea Markets. "It's a very fluid, easy to have in your portfolio so it is very popular."
Denmark's mortgage bonds have not suffered a defect since they were introduced after the fire of Copenhagen in 1795 large. Mortgage lenders can not take customer deposits, so they use mortgage to raise funds and spread the risk of real estate loans.
Denmark loans adjustable rate resets every year, with investors such as pension funds for competition for mortgage securities. Most auctions are held in December. Prices for investors to pay the mortgage bonds determine the rates lenders can charge.
Danish house prices rose by 3.3 percent annually in the third quarter, the Copenhagen-based Association of Danish Mortgage Banks said on 26th October.
Denmark's economy will expand 2 percent this year and 2.3 percent in 2011, compared with 1.7 percent and 1.5 percent growth for the 16 nations using the euro, IMF International said in its World Economic Outlook last month.
Denmark's central bank believes the economy grows by 2 percent this year and 1.9 percent in 2011 and 2012, said in his report of the fourth quarter on December 9.
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