Covered Bonds

As ever, The Cover is taking its cue from the market and today’s update will be the last until the New Year, barring any exceptional circumstances. We will return on January 2, 2008.

Just as the covered bond market was hoping that it could say a quick goodbye to the annus horribilis that was 2007, our top investigative journalist has uncovered reports of a plot to overthrow the ancient regime. Either that, or it’s silly season at The Cover.

Deutsche Postbank finishes the roadshow for its debut jumbo mortgage Pfandbrief tomorrow (Friday) and could be one of the first issuers into the market in the New Year. Marcus Chromik, head of primary capital markets at Postbank, told The Cover that with everyone hoping that high quality credits will reopen the market, Postbank could deliver just what the market is looking for.

Portugal’s Banco Santander Totta has mandated Morgan Stanley to arrange its covered bond programme, and BNP Paribas, Morgan Stanley and UniCredit to lead manage its inaugural issue. The bank joins Banco Espírito Santo and Caixa Económica Montepio Geral in the pipeline for what should be a busy Portuguese sector next year.

HSH Nordbank has been stressing the mobility of the collateral of ship Pfandbriefe on the roadshow for its first benchmark. Whereas housing is susceptible to the economic ebbs and flows of its location, argues the issuer, ships can go wherever favourable winds blow.

Moody’s has put on review for downgrade the triple-A ratings of WM Covered Bond Programme issues, after cutting Washington Mutual Inc from A3 to Baa2 and Washington Mutual Bank from A2 to Baa1, both with stable outlook. The rating agency had said in its pre-sale report that the covered bonds could come under pressure if WaMu Bank’s rating fell below A3.