Covered Bonds

A new issue from Banco Santander Totta as early as tomorrow (Tuesday), after today’s continental European holiday, could provide further clues as to whether the widening trend in the primary market evident since last September has finally come to an end.

Despite the coming Monday being a holiday for much of Europe, market participants are tipping next week to be a busy one given the well-stocked pipeline, particularly given that some issuers have concluded their preparations.

Norway’s DnB Nor Boligkreditt priced its new Eu2bn three year covered bond at 15bp over mid-swaps yesterday (Wednesday) afternoon. The issuer announced that it was pleased with the final size and to have continued building its curve.

Caixa Catalunya showed the Spanish market to be in rude health today (Thursday) despite launching the fourth two year deal from the country in just over a week, attracting more than Eu2.5bn of demand from some 90 accounts to put together a Eu1.75bn transaction – the largest cédulas hipotecarias since the crisis began last summer.

Euromoney published the result of its annual credit research poll yesterday (Tuesday), including the winners of the covered bonds/Pfandbriefe category.

Bancaja came hot on the heels of BankInter yesterday (Tuesday) afternoon to price a new Eu1bn two year cédulas at 65bp over mid-swaps. The issuer declared itself pleased to have launched its first benchmark deal so soon after the market’s reopening. Despite concerns over execution, the leads said worries over the order book and an apparent lack of coordination with BankInter were refuted by the successful pricing of both deals.

Norway’s DnB Nor Boligkreditt opened books this morning on a new three year euro benchmark with pricing fixed at 15bp over mid-swaps, after shadow bookbuilding yesterday afternoon at a slightly tighter level.

BankInter continued the revival in the cédulas market yesterday (Tuesday) afternoon when it priced a Eu1.5bn two year new issue at 52bp over mid-swaps, despite a deal at almost the same time from Bancaja. Meanwhile, market participants were already lining up the next cédulas issuer.