With the bond market still an important source of debt, property bonds totalling NOK 33 billion have been issued to Norwegian companies so far this year. That compares with NOK 29 billion for the whole of 2020, which was a strong year in this market.

Since August, most new issues have been in the investment grade segment, with the large heavyweight players behind almost the whole volume. We consider this to be a little accidental, and have the impression that the bond market is open to a broad range of players.

We saw in part that a number of high-yield bonds were issued for properties in SPV structures earlier in the summer. So far this year, such issues account for just under 40 per cent of the volume.

Credit spreads have shown a weak contracting trend over the past quarter, and are at a very low level in historical terms. We are in a period of narrow spreads and, with a cyclical upturn in the Norwegian and international economies, good arguments can be advanced for this position persisting a while.

On the other hand, the financial markets appear a little more nervous with regard to the Federal Reserve’s tapering process, Evergrande and possible changes to interest-rate projections from Norges Bank.

As with the bank market, tenors in the bond sector have declined significantly in recent years. Most bonds are issued today with a tenor of less than five years, and 10-year terms are seen only exceptionally.

There is little question that the debt market is functioning very well at the moment through both banks and bonds.