New property bonds totalling NOK 17 billion have been issued so far this year, compared with NOK 29 billion for the whole of 2020 – which was a strong year for the bond market. Issues have covered a wide range, with high-yield bonds accounting for more than 40 per cent of the volume issued since 1 January.

Credit spreads have remained stable over the past quarter. We are in a period with narrow spreads and, with a cyclical upturn in the Norwegian and international economy, this is likely to persist for a while. Moreover, the number of bond buyers exceeds issuers, which means that many investors are struggling to achieve the exposure they want. That in turn is keeping spreads narrow.

As in the bank market, terms to maturity for loans have shortened substantially in recent years. Most bonds issued today have terms of less than five years, and 10-year bonds are only offered in exceptional circumstances. 

Examples of bonds issued in the past quarter include the following:

• Terningen arena, Elverum
  School with 16-year WAULT. Acquired for NOK 1 141 million. Bond of NOK 613 million, 4.3-year term and interest rate of 2.95 per cent. Bullet.