Covered Bonds

EuroWeek and The Cover, in association with Banca IMI and UniCredit, brought together leading issuers and investors from Italy to discuss the importance of obbligazioni bancarie garantite to them, as well as pricing and regulatory issues facing the market.

DVB Bank is targeting a Eu250m three year debut ship Pfandbrief, and the issuer told The Cover that it is also considering taking up aircraft covered bonds.

Fitch placed AAA mortgage covered bonds issued by Cajamurcia on Rating Watch Negative yesterday (Monday), after placing the issuer on RWN on Friday because its integration into a new banking group with three other cajas was approved.

A transparency initiative launched by the Association of German Pfandbrief Banks (vdp) that aims to make it easier for market participants to analyse the cover pools of Pfandbrief issuers has met with approval from covered bond analysts and investors.

A 10 day auction by Denmark’s Nykredit to refinance adjustable rate mortgages resulted in the sale of Dkr44.3bn (Eu5.95bn) covered bonds and historically low interest rates for retail borrowers, according to the mortgage bank.

Fitch downgraded Spanish bank La Caixa from AA- to A+, on stable outlook, yesterday (Monday), because of challenges to the bank’s asset quality posed by a downturn in the Spanish property market and the country’s weak economy.

SNS Bank will today (Tuesday) price the second long dated Dutch benchmark covered bond in a week, while Banco Popular Español has set the spreads for an exchange that is open until Friday and a Swedish covered bond issuer has set up a US MTN programme.

Moody’s cut covered bonds issued by Anglo Irish Bank Corporation (Anglo Irish) and Anglo Irish Mortgage Bank (AIMB) from Aaa to Aa2, on review for possible downgrade, on Friday, because of concerns over the liquidity of commercial assets backing the covered bonds. Meanwhile, Fitch put AIB Mortgage Bank’s mortgage covered securities on Rating Watch Negative.

A rare one year issue, from Germany’s SEB, was the only live deal this (Monday) morning as the covered bond market got off to a slow start, despite one syndicate banker saying that the market was open for quality supply. Meanwhile, SNS Bank has mandated for a new benchmark.

Fitch placed Caja de Ahorros de Murcia and three other Spanish banks on Rating Watch Negative on Friday, because the General Assemblies of the four cajas approved an integration contract to form a banking group through an Institutional Protection Scheme (SIP). The rating agency said the SIP contract is expected to include a legally-binding cross-guarantee mechanism encompassing solvency and liquidity.