Svensk Exportkredit AB, the Swedish government-owned investment agency whose sales of structured notes fell 73 percent this year, named Erik Haden as executive director and head of funding in Stockholm.
Haden took over from Richard Anund at the beginning of September, Edvard Unsgaard, SEK’s deputy head of communications, said in a telephone interview. Anund, who held the job for eight years after joining the agency in 1995 as a member of the funding team, is working in SEK’s Singapore office. Unsgaard declined to say what his title is and didn’t respond to questions seeking more detail in a follow-up e-mail.
Banks use SEK to sell notes because it historically has had better credit ratings. The agency has the second-highest credit grade from both Moody’s Investors Service and Standard & Poor’s. Banks, which often underwrite sales of their own structured notes, work with third-party issuers partly to diversify credit risk for investors.
SEK lost distributors for its structured notes after Scandinavian counterpart Eksportfinans ASA was cut seven levels to junk by Moody’s Investor Service in November, Bloomberg News reported in August. Norway, which owned 15 percent of Eksportfinans, began withdrawing funds from the agency in favor of a new loan program after it failed to meet European Union regulatory requirements.
SEK has sold $428.1 million in structured notes this year, 73 percent less than last year, Bloomberg data show. The largest offering on Aug. 30 was $80 million of 14-month notes tied to the Standard & Poor’s 500 Index that yield three times the benchmark’s gains up to 16.08 percent with all capital at risk, according to a prospectus filed with the U.S. Securities and Exchange Commission. Bank of America Corp. distributed the note for a 2 percent fee.
Bank of America has underwritten all of SEK’s structured notes deals this year, Bloomberg data show. Goldman Sachs Group Inc. (GS:US) hasn’t distributed any structured notes for the company since December, and Wells Fargo & Co. (WF:US) since July 2011, after together they handled $419.8 million of its securities last year. New York-based Goldman Sachs has underwritten other notes for SEK, such as a three-year, $250 million floating-rate bond issued July 30.
Structured notes are securities created by banks, which package debt with derivatives to offer customized bets to investors while earning fees and raising money. Derivatives are contracts whose value is derived from stocks, bonds, currencies and commodities.
Retail investors would start to question if Sweden would stop guaranteeing SEK’s funds, Anund said in an August telephone interview.
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