Covered Bonds

The Banque Populaire group (BFBP) priced its Eu1bn three year covered bond yesterday (Wednesday) afternoon at 25bp over mid-swaps, after a protracted bookbuilding process that began on Tuesday morning.

An innovative puttable three year cédulas hipotecarias for La Caixa was successfully generating interest from investors this (Thursday) morning, with more than Eu600m of orders placed in the first hour and a half of bookbuilding.

The books were this (Thursday) morning opened on Millennium BCP’s long awaited covered bond and rapidly filled. However, some market participants said that the exercise reminded them of Banco Espiríto Santo’s Eu1.25bn three year debut in January, which sparked a repricing of the secondary market.

The Cover’s film critic took a wrong turn in Frankfurt recently and ended up at Dresdner Kleinwort’s covered bond conference. The renowned Jean-Luc Covered still found plenty to critique, but, like a Chekhov play, he wasn’t sure if he was watching comedy or tragedy, especially when the new vdp ad premiered.

Fitch yesterday (Tuesday) afternoon reacted to Monday’s transfer of Düsseldorfer Hypothekenbank to the Association of German Banks’ (BdB) guarantee fund by upgrading its long term rating from BBB- to A-. However, some German analysts said that DHB’s fall had already damaged the Pfandbrief’s image and reports of further writedowns at HVB ensured that the sector remained nervous.

France’s Banque Populaire group (BFBP) finally closed the books on its new Eu1bn three year covered bond at 12.30pm London time today (Wednesday). The deal is expected to be priced this afternoon, but there have been questions raised over the level of interest from end investors.

The disarray in the primary market this week has not deterred issuers old and new from pushing on with their covered bond plans. DnB Nor has picked leads for a new benchmark and Banco BPI has announced the arrangers of its programme and scheduled a roadshow.

La Caixa will be selling a Eu1bn short four year cédulas hipotecarias to domestic retail investors in the coming days at a spread of Euribor plus 10bp. The deal is believed to be the largest Spanish covered bond to be sold to end investors this year and shows cédulas issuers’ access to an investor base that is often overlooked.

Investors’ reactions to the performance of covered bonds in today’s turbulent markets was a topic of discussion at the IIR Securitisation 2008 conference in Amsterdam last Thursday. But while there was understanding of their sentiments, their greater comfort with a certain German name than top Spanish names was questioned.

France’s Banque Populaire group (BFBP) has opened the books for a new euro benchmark covered bond as it attempts to grasp the chance that CRH turned down today.