03 April 2014 – Nordic ABM is the fastest-growing Nordic marketplace. While similar Nordic marketplaces stand still, this week saw the 1, 000th issue listed on Nordic ABM, which is the alternative marketplace for bonds and certificates operated by Oslo Børs.
Recent years have seen a sharp increase in the number of fixed income issues listed on the Oslo Børs marketplaces. Last year saw as many as 337 new bond and certificate issues listed on Nordic ABM, and so far this year 67 borrowers have raised new loan capital from 93 new issues. Today Axis Offshore, BN Bank and Bank 1 Oslo Aker listed new fixed income issues, pushing the total number of fixed income securities listed on Nordic ABM above 1, 000.
“The bond market has become much more accessible since we established the Nordic ABM marketplace in 2005. It has also become a much more important source of capital for companies, including SMB companies”, comments Bente Landsnes, CEO and President of Oslo Børs.
A different story in Oslo
Growth in the Oslo bond market has not been matched in the other Nordic countries. NASDAQ OMX opened a similar marketplace, First North Bond Market, in 2012. So far, the marketplace has 12 listed securities from ten borrowers.
“Norwegian investment firms have excellent placing capacity, and large fixed income issues are often placed in just a few hours. This gives companies a very efficient way to raise loan capital”, explains Bente Landsnes. She goes on to say, “Norwegian investment firms have developed both specialist expertise and placing capacity for borrowers in the energy and maritime sectors. These are attractive sectors for international investors, and have helped to promote Oslo Børs into the elite division internationally”.
Foreign companies raise loan capital in Oslo
It is not only investors who are attracted by the strong global position of Oslo Børs. Foreign companies are increasingly turning to the Norwegian fixed income market to raise loan capital. Oslo is often mentioned in the same way as New York and London as one of the world’s best-functioning high yield markets.
The list of new foreign corporate issues so far this year includes Axis Offshore and energy companies such as Iona Energy, Salamander Energyand Igas Energy. The Dutch ship owner Bluewater Holding carried out the largest new issue so far this year of NOK 2.4 billion, while the Toronto-listed energy company Iona Energy carried out the second-largest placement at NOK 1.7 billion.
The strong growth seen in the number of fixed income issues listed on the Oslo Børs marketplaces also reflects changes in the availability of bank lending. As the banks have taken action over recent years to strengthen their capital adequacy, many have found it necessary to restrict their lending to the corporate market. This has encouraged companies to turn to the securities market and the stock exchange to raise loan capital.
There has also been a trend since the financial crisis for investors to require that companies issuing loan capital are subject to the duty of disclosure. A stock exchange listing ensures a proper flow of information from the company to investors. This trend is particularly pronounced for high yield bond issues, which can represent a higher risk exposure for investors.
Speedy and flexible listing process
Oslo Børs operates two marketplaces for listing and trading in fixed income instruments: Nordic ABM and Oslo Børs. The rules on duty of disclosure and trading are very largely the same for the two marketplaces, but Nordic ABM offers a speedier and less comprehensive listing process.
2013 was a record year for the Oslo Børs fixed income marketplaces. More new fixed income issues were listed than ever before, with borrowers raising a record level of loan capital. In total, borrowers other than the Norwegian State raised NOK 280 billion by issuing fixed income instruments (bonds and certificates), representing a new record for the 10th year in a row.
The upward trend has continued in 2014. In the first three months of the year, borrowers excluding the Norwegian State have raised NOK 83.8 billion of loan capital through bonds and certificates listed on the Oslo Børs marketplaces. This is NOK 7.4 billion higher than by the same time last year, which was itself a record year.
With 1, 002 fixed income issues listed on Nordic ABM, there are now 1, 621 fixed income issues listed on the Oslo Børs marketplaces in total. (See chart below).