Eksportfinans faces collateral questions following downgrade
Junk-rated export lender says it has enough reserve liquidity to meet obligations while it is being wound up - but dealers are not convinced
Dealers are concerned the downgrade of Norwegian lender Eksportfinans – which is being replaced by a new state-backed entity – means it will not be able to continue collateralising its large derivatives portfolio, and say counterparties will back away from the export lender as a result. The company will not make new loans while it is being wound up, but its existing derivatives will remain in place while outstanding loans mature, and the company says it intends to manage that portfolio actively
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