Nasdaq Nordic Debt Market Continues Growth
- Total listed volume of debt products listed at Nasdaq Nordic increased by 4% year over year
- Sustainable Debt Market more than doubled in size, added retail oriented products to product range
- Brexit turbulence, low rates and efficient issuance processes expected to keep attracting issuers and investors to the region
Nasdaq saw a strong growth for its Nordic Debt Market, including the segments for Corporate Bonds and Sustainable Debt, during 2018. While the growth for all debt products listed in the Nordics remains stable at around 4 percent, listed volumes for corporate bonds grew by 13 percent in 2018, and Nasdaq’s Sustainable Debt Market more than doubled in size.
“The Nasdaq Nordic Debt Market is a vital part of the unique Nordic financial eco system, and continues to serve as an inspiration for other marketplaces around the world. Over the last year, we have seen an increased presence by both international and Nordic issuers,” says Ann-Charlotte Eliasson, Head of Nordic Debt Listings at Nasdaq. “The strong appetite for yield in a low rate environment, coupled with an efficient and reliable issuance process have contributed to this increased demand. Continued low interest rates and Brexit process is likely to contribute further to this positive trend in 2019.”
Nasdaq’s Nordic Sustainable Debt market grew by 112 percent, from 3.8 billion EUR in 2017 to just over 8 billion EUR in 2018. Meanwhile, a total of 15 new issuers (36 in total) listed a total of 85 new instruments, compared to 35 listings in 2017. New sub-segments, including one for sustainable structured products aimed at retail investors, and commercial papers were added to the offering. The market also expanded geographically across the region in 2018, with green bonds now listed in Finland, Latvia, Lithuania, Iceland and Finland in addition to Sweden.
“Sustainability continues to be an increasingly important factor behind many investment decisions, and issuers subsequently want products that respond to this demand,” says Fredrik Ekström, head of Nordic Fixed Income at Nasdaq. “The Nordic region is rapidly becoming a hub for listing sustainable bonds and other products, aimed towards both large, institutional investors and smaller private investors.”
Among the most notable corporate bond listings last year were Munifin, Landshypotek and Advanced Soltech. Also, in May 2018 leading energy company Vattenfall established the first ever Swedish law governed EMTN program, and listed outstanding bonds valued at approx. 5.5 billion EUR. The successful track record for listings of Nordic debt products was also a driver behind Nasdaq’s recent launch of a U.S. Corporate Bond Exchange, announced in December last year.
In total, more than 6,900 instruments, with a volume of over €910,000 million, are listed on Nasdaq’s Nordic Debt Market, with Mortgage Bonds, Government Bonds and Corporate Bonds being the three largest categories. The Nasdaq Sustainable Debt Market was the first of its kind in the world when it was launched in 2015, and is today the world’s second largest market for sustainable debt products, in terms of number of instruments listed.
Selected 2018 highlights:
In April, Advanced Soltech pioneers green retail bonds under a framework rated “dark green” by Cicero, with advice from Avanza Bank. A new market segment called First North Sustainable Retail Bonds is launched in connection to the listing.
In May, Landshypotek together with Danske Bank, Nordea and Handelsbanken, issued the first ever green covered bond financing sustainable forestry. At 5.25 bn SEK, it also marks the largest ever SEK bond to date. The bond was issued under Landshypotek Bank’s EMTN program and was the first of its kind to be listed on Nasdaq Stockholm.
Also in May, Nasdaq launched the Helsinki Sustainable Bond Market and listed Munifin’s green bonds totaling approximately 1 billion EUR.
In August, the Sustainable Debt Market reached 100 listed Green Bonds.
In September, Crédit Agricole and Garantum developed green structured products and listed them on Nasdaq Sustainable Products, making sustainable debt investments more accessible to the private investor community.
Also in September, Vasakronan redesigned is its green bond framework to include commercial papers and received a Dark Green rating from Cicero. The green commercial papers were the first of their kind and listed on a new, dedicated segment on Nasdaq Stockholm.
The City of Reykjavik listed the first green bond on the Nasdaq Iceland.
Also in December, BNP Paribas and Strukturinvest listed their first green structured product on Nasdaq Sustainable Products, continuing the growth of the market segment in the Nordics.
ICMA said improvements need to begin with the Esma bond databases.
Platform operator aims to boost efficiency and lower trading costs.
Post-crisis regulation has pushed markets toward centralised clearing.
Adding China is the largest rebalancing of the Bloomberg Barclays Global Aggregate index.
Influence of the buy side as price makers varies across product and venue.