Covered Bonds

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.

Moody’s yesterday (Thursday) placed on review for possible downgrade mortgage covered bonds issued by AIB Mortgage Bank, Bank of Ireland Mortgage Bank and EBS Mortgage Finance. Fitch today said that a downgrade of Ireland’s sovereign rating will not have an immediate impact on its ratings of Irish covered bond programmes.

Canadian Imperial Bank of Commerce issued the first Kangaroo covered bond since March 2007 yesterday (Thursday), pricing a A$750m (Eu530m or C$748m) three year deal at 48bp over swaps, the tight end of 50bp area guidance, on the back of a book of more than A$1bn.

Nykredit Realkredit priced an inaugural Eu500m long three year junior covered bond last Friday (October 1). The funding instrument is unique to Denmark and — in the words of the issuer — represents "senior debt with a twist".

Moody’s put the Aa3 rating of public sector covered bonds issued by Depfa ACS Bank on review for downgrade today (Thursday) because of a cut in the issuer’s rating from A3 to Baa3 last Friday.

Standard & Poor’s yesterday (Wednesday) affirmed at AAA mortgage backed covered bonds issued by Sweden’s Länsförsäkringar Hypotek under its revised rating methodology.

Italy’s UBI Banca will today (Thursday) price a Eu500m five year issue on the back of modest demand, while DnB Nor Boligkreditt yesterday sold its first dollar benchmark covered bond and Canadian Imperial Bank of Commerce priced its first covered bond in the Kangaroo market.

Justin Fox will be leaving Nationwide Building Society, where he has been head of treasury markets, in the New Year.

Sweden’s Skandinaviska Enskilda Banken priced its first seven year euro benchmark covered bond yesterday (Wednesday), a Eu1bn maximum deal that the issuer said cleared at the re-offer spread “very handsomely”.

Moody’s downgraded Raiffeisenlandesbank Niederoesterreich-Wien from Aa3 to A1 yesterday (Wednesday) after carrying out stress tests on the bank’s earnings, assets and capital.

Tim Skeet has left Bank of America Merrill Lynch, where he was head of covered bond origination.

Spain’s Unicaja was keen to use the launch of a cédulas hipotecarias issue this week as an opportunity to engage with investors on issues facing the country’s financial system and to highlight the savings bank’s individual story, an official at the issuer told The Cover.