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Bloomberg
Nykredit Realkredit A/S is abandoning plans for an initial public offering, pulling what could have been the biggest listing of a Nordic bank in more than two decades.
Denmark’s largest mortgage lender, which dominates the country’s $480 billion covered-bond market and provides home loans to about 40 percent of households, said an offer from a group of private Danish investors means an IPO is no longer needed to generate capital.
People familiar with the talks said in September Nykredit might have raised $1 billion through an IPO. But on Tuesday five pension funds offered to pay 11.6 billion kroner ($1.8 billion) for a combined stake of 16.9 percent and pledged to “contribute capital to Nykredit in future, should such need arise,†according to a statement from the bank.
The deal is the latest example of pension funds snapping up equity in an effort to prop up returns amid record-low interest rates. It comes despite regular warnings that corners of Denmark’s property market may be overheated, though the country’s biggest banks all say there’s no sign of a bubble.
Meanwhile, foreign investors are piling into AAA-rated Danish mortgage bonds, with offshore entities now holding about one-quarter of the market.
The buyers are headed by PFA, Denmark’s largest commercial pension fund, with PensionDanmark, PKA, AP Pension and MP Pension as co-investors, Nykredit said.