Covered Bonds
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The last covered bond stronghold against the financial crisis fell last night, when the Association of German Banks (BdB) took control of troubled lender Düsseldorfer Hypothekenbank. The BdB intends to sell the bank to a third party in the coming weeks. There has been an immediate fallout, with France’s Caisse de Refinancement de l’Habitat pulling back from its new issue.
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Caisse de Refinancement de l’Habitat has pulled back from launching its new covered bond issue, blaming the events in the German market.
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The US Federal Deposit Insurance Corporation’s interim final policy statement, published last week, showed its willingness to give covered bonds a privileged status, but, as a consultation document, it raised as many questions as it answered. However, an FDIC spokesperson gave The Cover clarifications on several points.
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Skandinaviska Enskilda Banken has avoided being knocked off course by adverse headlines and has priced a new Eu1bn five year benchmark covered bond at 17bp over mid-swaps this morning.
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After successfully placing the longest covered bond benchmark since the end of February, Dexia Municipal Agency told The Cover that while it was pleased to demonstrate the range of maturities open to it, crossing the psychological barrier of pricing in the double digits over mid-swaps to please investors cuts both ways.
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Eurohypo has mandated Commerzbank, Deutsche Bank, Dresdner Kleinwort and Morgan Stanley for a five year public sector Pfandbrief issue, its first jumbo this year, but the timing of the deal is unclear. When the deal does emerge, it could take public sector Pfandbriefe into new territory.
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Sweden’s SEB this (Monday) morning opened the books on its new five year euro benchmark, with Caisse de Refinancement de l’Habitat (CRH) happy to hold fire on its deal while it waits for SEB to complete its new issue.