Covered Bonds

With the primary market shut to new issues tap dancing looks set to come back into fashion. Dexia Municipal Agency and Münchener Hypothekenbank have led the revival over the last week, with both increasing outstanding public sector deals.

Glitnir has added covered bonds to its funding arsenal to help overcome the volatility that has been threatening Icelandic banks this year, selling Ikr56bn (Eu474m) in two tranches off a Ikr100bn programme.

Bank of Ireland Mortgage Bank this week issued what is believed to be the largest Irish mortgage ACS to be sold to end investors this year, a Eu500m deal. The Cover understands that the Irish issuer has also hired a new head of long term funding from Depfa.

Santander is said to have retreated from launching a new three year benchmark covered bond today (Thursday), after having sounded out the possibility of a deal yesterday (Wednesday).

When Don McLean sang “Bye-Bye, Miss American Pie” he was apparently expressing his feelings on the transition from the innocence of childhood to the darker realities of adulthood. Covered bond issuers at the Euromoney US Covered Bond Investor Forum in New York earlier this month faced up to a similar mood of disillusionment.

EuroWeek and The Cover, in co-operation with Goldman Sachs, have produced the third annual Covered Bond Markets map. Click through to download a pdf of the 2008 edition or to request a hard copy.

Société Générale is planning to issue its debut covered bond, a five year obligations foncières issue of up to Eu1.5bn backed by loans to the public sector, according to a report from Standard & Poor's.