Covered Bonds

Depfa ACS Bank has only one rating remaining after Standard & Poor’s became the second agency to withdraw its covered bond rating this week. Analysts suggest this could result in forced selling of Depfa’s covered bonds if Moody’s follows suit, but they still believe that the bonds will be paid out in full.

Austrian covered bonds have been largely unaffected by the reinstatement of the State of Carinthia’s guarantee and the ensuing downgrade by Moody’s of the state to B3, according to analysts at LBBW.

Credit Suisse has bulked up its covered bond team with a new hire who will join FIG syndicate.

Banco Popolare has obtained the approval of investors to remain the account bank on its own covered bond programme, even though this will result in those covered bonds being downgraded to a sub-investment grade rating.

The Bank of Scotland has become the first bank to not win approval to switch some of its covered bonds from a hard to a soft bullet repayment.

The Dutch mortgage market, one of the largest in Europe, could be poised for radical transformation that stands to change the way loans are originated and funded. Bill Thornhill reports.

Stadshypotek became the second Swedish bank this year to issue a sterling floating rate covered bond, pricing its deal in line with Canadian issuers.

The newly set up Dutch mortgage bank, Solid Mortgages, is planning to introduce the Danish mortgage system to the Netherlands. Following a presentation to be made this September in Barcelona, the first transaction from Solid could emerge early in 2016, if not before.

Crédit Agricole Home Loan SFH issued a €200m tap of a seven year benchmark covered bond on Thursday. The small tap presented minimal execution risk and was priced with little concession to the curve.

Peripheral covered bonds have performed well lately, especially relative to the long end of the French market where selective sellers were reported on Wednesday. But once the covered bond purchase programme (CBPP3) has finished, peripheral markets are likely to be the most vulnerable.

The Bank of Scotland has become the first bank to not get approval to switch some of its covered bonds from a hard to soft bullet repayment. Though it did get approval to switch the majority of deals to a soft bullet, the result suggests investors are finally starting to assert their rights.

At least three Turkish banks have set up covered bond programmes and could theoretically be ready to issue their first benchmarks this autumn. However, even if the political outlook improves, the cost of funding in dollars using established senior unsecured programmes may be difficult to beat.