Covered Bonds

New issues for GCE Covered Bonds and UniCredit Bank Austria and a large Caja Madrid tap took this week’s supply of Eu500m-plus deals to a solid Eu6.7bn, with GCE said to have benefitted from a recent paucity of new three year issuance from so-called core jurisdictions.

Fitch placed Caja Madrid on Rating Watch Negative yesterday (Thursday) and Bancaja and Caixa Laietana on Rating Watch Positive, following approval of an integration contract by the General Assemblies of the three cajas and several others to form a group through an Institutional Protection Scheme (SIP).

Banca Monte dei Paschi di Siena reached a Eu1.25bn size with its second obbligazioni bancarie garantite benchmark on Tuesday despite coming on a hectic day. The issuer spoke to The Cover about the deal’s timing, maturity and pricing.

Fitch downgraded covered bonds issued by Anglo Irish Bank Corporation and Anglo Irish Mortgage Bank (AIMB) from AAA to AA+, and placed them on Rating Watch Negative, yesterday (Thursday), after downgrading the issuers from A- to BBB+ on Wednesday because of an announcement by the Irish government that Anglo Irish will be split into an asset recovery bank and a funding bank.

A covered bond liability management exercise for Dexia Municipal Agency that closed on Wednesday resulted in the creation of two new issues totalling Eu2bn, with a planned new eight year tranche cancelled due to a lack of demand for that maturity.

A new burst of issuance hit the covered bond market this (Thursday) morning after a breather yesterday, with GCE Covered Bonds and UniCredit Bank Austria launching new deals and Caja Madrid offering an increase of a 2014 issue.

Standard & Poor’s placed Deutsche Postbank and subsidiary BHW Bausparkasse on CreditWatch Positive yesterday (Wednesday) because of Deutsche Bank’s intention to launch a public takeover bid for Deutsche Postbank.

EuroWeek and The Cover, in association with Nordea Markets and UniCredit, brought together leading issuers from Denmark, Finland, Norway and Sweden to discuss their experience of dealing with the changing face of the covered bond market.

A Senate Banking Committee hearing on covered bonds yesterday (Wednesday) showed that the success of initiatives to establish covered bond legislation in the US appears to hinge on lawmakers’ ability - if indeed it is possible - to reconcile calls from the Federal Deposit Insurance Corporation for flexibility in its handling of covered bonds in the event of receivership with legal certainty for issuers and investors.

ABN Amro built the biggest order book of five deals in the market yesterday (Tuesday) and the issuer told The Cover that its Eu1.5bn 12 year transaction was part of a strategy to lengthen the bank's maturity profile. Meanwhile, Caisse de Refinancement de l’Habitat was satisfied with a rare 12 year deal.

GCE Covered Bonds announced a mandate for a new covered bond this (Wednesday) morning, but otherwise the primary market was quiet after yesterday’s five euro benchmarks and one dollar issue.

Yorkshire Building Society launched its first benchmark covered bond since 2007 yesterday (Tuesday), a Eu600m five year Regulated Covered Bond that built on improving sentiment towards the UK, according to the issuer.