The European covered bond market received a vote of confidence yesterday when a Norwegian savings bank successfully sold €1.5bn ($1.06bn) of covered bonds, reopening an asset-class that has been paralysed in recent weeks by investors' fears over the turmoil in the UK financial sector.

The sale by SpareBank1 Boligkreditt, the bank's first covered bond and only the second from a Norwegian issuer, is the first of such securities in the over three weeks when the market has been all-but shut as a result of stresses in the UK banking sector that culminated in credit troubles at UK-mortgage lender Northern Rock.