Covered Bonds
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Crédit Mutuel-CIC priced its Eu2bn three year issue today (Friday) at 6bp over mid-swaps, having built a book of Eu3.6bn.
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The Investment Management Association today (Friday) threatened the expected smooth progress of legislation in the UK when it called on HM Treasury and the Financial Services Authority to re-consider their proposals for the planned Recognised Covered Bond regime.
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Leading issuers including Bank of Scotland and Depfa called for a greater commitment to the product from broker-dealers in New York if the covered bond market is to build on the foundations that they laid in the US early this year.
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Achmea Hypotheekbank priced its Eu1.25bn three year covered bond today (Thursday) at 9bp over mid-swaps, the tight end of the 10bp over mid-swaps area guidance.
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As revealed on The Cover yesterday (Wednesday), Barclays Bank is close to launching a covered bond programme, having incorporated Barclays Covered Bonds Limited Liability Partnership on Tuesday. The news reinforces the view that covered bonds will become an increasingly important funding tool in light of this summer’s turmoil, which has pushed up RMBS and senior unsecured funding costs sharply.
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Panellists at the Euromoney Spanish Capital Markets Forum in Madrid said yesterday (Wednesday) that the credit and liquidity crises of this year would not simply widen spreads, but reconfigure the use of securitisation and covered bonds.
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ABN Amro, BNP Paribas and Danske Bank are understood to have taken orders of Eu3.6bn for Crédit Mutuel-CIC’s Eu2bn deal by the time the books were closed early this afternoon, after opening books early this morning.
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Achmea Hypotheekbank closed books with orders of over Eu3bn this (Wednesday) morning for a Eu1.25bn three year deal, and tightened pricing from the 10bp area over mid-swaps to 9bp over.
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As leading issuers meet today (Wednesday) at the Euromoney Spanish Capital Markets Forum in Madrid, The Cover examines the dynamics that have frustrated the ambitions of the cédulas market in 2007, and what can be done to reposition the sector.