Covered Bonds

Kookmin Bank has hit a roadblock in a plan to spin off its credit card business: around $2bn of its credit card assets are tied up as collateral backing a $1bn (Eu717m) covered bond. The bank will now approach investors for permission to radically alter the collateral backing the deal, The Cover understands.

A 10 year obligations foncières issue launched by Compagnie de Financement yesterday (Thursday) reached the Eu1bn mark that an official at the issuer told The Cover was “a definite focus” for its tapping of what she described as a very technical part of the curve.

Concrete plans for new issue projects next week appeared thin on the ground this (Friday) morning, but this could be a misleading indicator of forthcoming supply. At least three issuers are on the road next week, Spanish banks are emerging from blackout periods, and bankers said that French issuers are likely to be encouraged by a successful Compagnie de Financement Foncier Eu1bn 10 year transaction sold yesterday.

The Federal Deposit Insurance Corp wants to work together with congressional proponents of a US covered bond market to establish "balanced" covered bond legislation to foster such a market, FDIC chairman Sheila Bair said at a housing finance symposium on Monday.

Kutxa made a convincing start as a standalone issuer of benchmark covered bonds when it sold a comfortably oversubscribed inaugural, Eu700m issue at the tight end of guidance on Tuesday.

Compagnie de Financement Foncier took advantage of an increase in yields to launch a Eu1bn 10 year obligations foncières issue on Thursday, its fourth euro benchmark of the year, after Axa Bank Europe SCF inaugurated an RMBS-backed obligations foncières programme with a Eu750m 10 year deal last Friday (October 22).

Banca Popolare di Milano maintained a promise to investors to issue a sizeable covered bond once a year when it on Tuesday sold a Eu750m five year obbligazioni bancarie garantite issue, an official at the issuer told The Cover.

Compagnie de Financement Foncier took advantage of an increase in yields to launch a Eu1bn 10 year obligations foncières issue today (Thursday), its third and longest dated Eu1bn or greater deal of the year.

Swedbank Mortgage priced its fourth euro benchmark covered bond of the year on Tuesday, a Eu1bn long three year deal that the issuer told The Cover was motivated in part by publication of robust third quarter figures.

Spain’s Kutxa priced a comfortably oversubscribed Eu700m cédulas hipotecarias issue yesterday (Tuesday) that attracted nearly as much investor interest as a Swedbank Mortgage Eu1bn long three year deal, while a Banca Popolare di Milano Eu750m five year received less attention on a busy day for euro covered bonds.

Fitch downgraded mortgage backed covered bonds issued by Caixa Económica Montepio Geral from AAA to AA, on negative review, yesterday (Tuesday), because of new asset analysis assumptions for Portuguese mortgages.

Fitch placed mortgage backed covered bonds issued by BA Covered Bond Issuer (BACBI) on negative review on Tuesday, after placing Bank of America NA on Rating Watch Negative on Friday.