Covered Bonds

Allowing Australia’s banks to issue covered bonds, if measures supporting the country’s residential mortgage backed securitisation market are introduced in parallel, would not undermine competition, the Australian Securitisation Forum said in its submission to a Senate inquiry into competition within the country’s banking sector.

France’s Caisse de Refinancement de l’Habitat yesterday (Thursday) sold a Eu300m increase of a Eu1.8bn 2020 transaction that was was driven by reverse enquiry and benefitted from a back-up in yields that syndicate officials said was conducive to long dated supply.

Standard & Poor’s today (Friday) placed five Portuguese covered bond issuers on negative review after it on Tuesday took the same rating action on the Portuguese sovereign [amended].

Australian financial institutions and organisations have called on the country’s government to allow issuance of covered bonds, with one bank pressing for urgent action. The comments were made in submissions to a Senate inquiry on banking competition that closed on Monday.

Australian financial institutions and organisations have called on the country’s government to allow issuance of covered bonds, with one bank pressing for urgent action. The comments were made in submissions to a Senate inquiry on banking competition that closed on Monday.

In brief: The Basel Committee for Banking Supervision is on track to release final Basel III rules by the end of the year, according to a statement made yesterday (Wednesday).

Kookmin Bank has obtained consent from its covered bondholders to swap credit card assets backing the covered bonds for cash, according to Moody’s. The restructuring of the cover pool will enable the Korean bank to spin off its credit card business into a separate company.

Benchmark covered bond issuance may have ended for the year as persistent market volatility and decreasing liquidity make any transaction inadvisable, according to syndicate bankers. One said that market conditions had improved slightly today (Wednesday), but that it remains doubtful that spreads will stabilise at levels that would allow issuance to resume this year.

The Bank of England has finalised detailed transparency requirements, including loan level disclosure, for RMBS and covered bonds used as collateral in its repo operations. The move to group covered bonds with securitisation has disappointed some market participants.

In brief: Fitch will no longer rate mortgage and public sector Pfandbriefe issued by Deutsche Genossenschafts-Hypothekenbank AG, according to a statement released yesterday (Monday). The bank’s covered bonds will therefore only be rated by Standard & Poor’s.