Covered Bonds

Landesbank Hessen-Thüringen priced its first benchmark mortgage backed Pfandbrief yesterday (Tuesday) to build on a return to the international markets in April, and the issuer told The Cover that the deal was fuelled by the prospect of achieving pricing comparable to that available in its domestic market.

Moody’s assigned a Aa1 rating to mortgage backed covered bonds of Caja España yesterday (Tuesday), after rating the new entity Baa1, on stable outlook.

Standard & Poor’s is assessing how a restructuring of four covered bond programmes of HRE group resulting from a transfer of assets to wind-down entity FMS Wertmanagement will affect its analysis of the covered bonds.

Landesbank Hessen-Thüringen offered investors a rare opportunity to participate in a sizeable Pfandbrief transaction and gain exposure to its credit today (Tuesday), with a Eu750m four year issue duly snapped up by accounts in a market where jumbo Pfandbriefe have been few and far between.

Standard & Poor’s downgraded mortgage backed covered bonds issued by AIB Mortgage Bank from AAA to AA+, on negative outlook, yesterday (Monday), after cutting the bank’s parent on Friday.

Standard & Poor’s downgraded Allied Irish Banks from A- to BBB+, on negative outlook, on Friday, because of a deterioration in the bank’s reputation driven by an increase in the level of capital it is required to hold by its regulator and government imposed management changes.

The covered bond market is in good condition and generally open for issuance, syndicate bankers reported today (Monday), but with no new mandates publicly announced since last Thursday a deal from Italy’s Intesa Sanpaolo was this morning the most concrete new issue project in the pipeline for the week.

The European Central Bank has introduced a rule exempting non-Ucits covered bonds from provisions prohibiting a counterparty from submitting as collateral an asset that is issued or guaranteed by itself or by any other entity with which it has close links.

Standard & Poor’s on Friday affirmed at BBB the ratings of five rated members of Hypo Real Estate group following a transfer of assets to run-off entity FMS Wertmanagement. Fitch affirmed Deutsche Pfandbriefbank but cut those of Depfa Bank plc and subsidiaries Depfa ACS Bank and Hypo Public Finance Bank.

DnB Nor Boligkreditt debuted in the US market with a $2bn (Eu1.43bn) five year issue on Wednesday that gave it tighter pricing than was available in euros, but the issuer told The Cover that strong US demand was the most pleasing aspect of the benchmark.

The first obligations foncières issued by Axa Bank Europe SCF will be backed by a Eu1.5bn senior tranche of an RMBS of Belgian residential mortgages originated by its parent, Brussels-based Axa Bank Europe. Bankers at arranger BNP Paribas said that this provided the European retail banking arm of French insurance group Axa with a sensible way of issuing in the absence of Belgian covered bond legislation.

Italy’s UBI Banca sold a Eu500m five year covered bond yesterday (Thursday) after coming up against reduced demand for obbligazioni bancarie garantite issues and for its credit following concentrated supply from the country, but nonetheless attracted quality orders, according to a syndicate banker at one of the leads.