As BlackRock starts to kick the tires of Sweden's credit market at the behest of the Riksbank, a world of trouble is about to reveal itself.
"This market seems completely dead," said Hakan Karlsson, chief executive of MaxFastigheter i Sverige AB, a property firm with an unrated bond maturing in September. "If we want to retain the possibility of raising money through bonds, some kind of support is needed for it to function."
BlackRock Financial Markets Advisory, a unit of the world's biggest asset manager, was just hired to help Sweden's Riksbank figure out how to buy into an asset class that recently saw its worst rout since the financial crisis. Against the backdrop of a dispute with parliament over the legality of such purchases, the Riksbank has pledged to acquire parts of Sweden's $45 billion krona corporate bond market.
Most corporate issuers are holding back until those purchases start. They "want to see the real effect" of the Riksbank's promise, said Gustav Bjorck, who runs the bond syndication desk at Swedbank in Stockholm.
For the CEO of another real estate issuer the current market is simply too expensive. "Only those who really need to issue bonds go to the market right now," FastPartner's Sven-Olof Johansson said.