Covered Bonds

The European Central Bank’s second covered bond purchase programme (CBPP2), reached just 41% of its €40bn target when it closed last month, according to figures released this week. The fact that the ECB did not even manage to buy half of what it had planned was nevertheless welcomed by supply-starved investors and dealers who claimed its actions had exacerbated the illiquid and technically-squeezed core markets on which purchases were focussed.

A £250m covered bond from Deutsche Pfandbriefbank puzzled rival bankers on Tuesday when it priced inside UK names in sterling after being driven by reverse enquiry from Asian investors, who accounted for nearly half the book.

Sparebank 1 Boligkreditt printed only the second seven year dollar covered bond since 2007 on Wednesday, pricing 2bp inside where Stadshypotek brought the first in September but with a modest new issue premium. Separately, the issuer said that its covered bond encumbrance was at the lower end of the Norwegian spectrum.

Crédit Mutuel CIC mandated joint leads Citi, Barclays, BNP Paribas, Goldman Sachs and JP Morgan for its debut dollar denominated covered bond on Thursday.

Dexia Group will fully dispose of its French municipal financing entity, Dexia Municipal Agency (DexMA), it revealed on Thursday, when releasing third-quarter earnings. In outlining its new structure, it clarified that Dexia Crédit Local (DCL), belonging to the Brussels based Dexia SA Grioup, would no longer be a shareholder of DexMA.

Moody’s assigned its first rating to a Russian covered bond on Tuesday. The ratings agency has given a provisional Baa1 long term rating to Rb5bn of Series 09-IP mortgage covered bonds to be issued by DeltaCredit Bank.

Belgium’s KBC Bank plans to issue a covered bond this year, it said on Thursday, following publication of its third-quarter results.

Sparebank 1 Boligkreditt printed only the second seven year dollar covered bond since 2007 on Wednesday, pricing 2bp inside where Stadshypotek brought the first in September but with a modest new issue premium. Separately, the issuer explained that its covered bond encumbrance was at the lower end of the Norwegian spectrum.

Belgium’s KBC Bank plans to issue a covered bond this year, it said on Thursday, following publication of its third quarter results. Meanwhile Belfius Bank told The Cover it was also ready to bring its first deal before the end of 2012. The banks are free to launch the deals after the Belgian central bank gave regulatory clearance last week.

Dexia group plans to dispose of its French municipal financing entity Dexia Municipal Agency (DMA), it revealed on Thursday, when releasing third quarter earnings. In outlining its new structure, it clarified that Dexia Credit Local (DCL) would no longer be a shareholder.

Moody’s has assigned its first rating to a Russian covered bond. The ratings agency has given a provisional Baa1 long term rating to Rb5bn of Series 09-IP mortgage covered bonds to be issued by DeltaCredit Bank.

South Korea’s proposed Covered Bonds Act should boost issuance, according to Fitch, which says the new law addresses areas important for investor protection.