Bloomberg News

Eksportfinans Pledges to Make All Debt Repayments When Due

February 24, 2012

(Updates to show bond yield decline in eighth paragraph.)

Feb. 21 (Bloomberg) -- Eksportfinans ASA, which the Norwegian government is dismantling after the lender failed to meet European capital rules, said it will cover all its debt obligations as they fall due.

“We still have every intention of repaying our debt as it matures,” said Elise Lindbaek, a spokeswoman at Eksportfinans in Oslo, in a phone interview today. A plan published at the end of November indicating repayments through 2017 “is still operable,” she said. The lender will also provide information when it reports its results on March 1, she said.

The 40-year-old lender, which since the government’s Nov. 18 decision to wind it down has received junk grades at Moody’s Investors Service and Standard & Poor’s, has about $35 billion in bonds outstanding, with investors as far afield as Asia. Japan’s Securities Dealers Association yesterday said it hadn’t received a “clear debt repayment plan,” and urged Norway’s government to provide more information on when investors can expect their money back.

Japanese holders of Eksportfinans bonds “are anxious,” Toshiyuki Kaneko, a manager at the planning unit of JSDA, said yesterday in an e-mailed reply to questions. “JSDA expects, for the sake of the bondholders, that the debt repayment plan of Eksportfinans will be announced as soon as possible.”

‘Watching Closely’

Eksportfinans, which was created to support Norway’s export industry, said Nov. 27 it will have 41 billion kroner ($7.2 billion) in bond debt by 2017. That compares with 167 billion kroner at the end of last year, the lender said. The company’s 120 billion-krone book of loans will shrink to 21 billion kroner by the end of 2017, it said.

In Japan, where investors hold more than 1 trillion yen ($12.5 billion) of Eksportfinans debt, including its Samurai and Uridashi notes, according to SMBC Nikko Securities Inc., the JSDA is “watching closely” the fallout of the downgrades, Kaneko said.

Eksportfinans is 15 percent owned by the Norwegian government. DNB ASA, the country’s biggest bank, holds 40 percent, while 23 percent is held by Nordea Bank AB, the largest Nordic lender. Danske Bank A/S in Copenhagen owns 8.09 percent.

The yield on Eksportfinans’ 4.75 percent 1 billion-euro note due June 2013 eased to 5.14 percent as of 2:41 p.m. in Oslo, compared with 5.32 percent yesterday, according to Bloomberg generic prices.

S&P said last week it was compelled to cut Eksportfinans to junk after the Norwegian government proved unwilling to provide the kind of backing needed to keep the lender investment grade. Trade Minister Trond Giske in a Dec. 6 interview had described Eksportfinans as a “strong, solid” company that enjoyed government backing and said downgrades in November were unjustified.

Norway’s Finance Ministry is satisfied that the lender enjoys “good liquidity and solvency,” according to an e-mailed reply to questions sent Feb. 16 by Tor Audun Gram, a Finance Ministry spokesman.

--Editors: Tasneem Brogger, Christian Wienberg.

To contact the reporter on this story: Jonas Bergman in Oslo at jbergman@bloomberg.net

To contact the editor responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net


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