Covered Bonds

Italy’s UniCredit launched a Eu1bn maximum seven year issue this (Monday) morning that syndicate bankers away from the deal complimented for being “bang-on”, while Spain’s UniCaja is testing investor interest for a Eu500m minimum five year cédulas.

Denmark’s Nykredit Realkredit priced a Eu500m long three year junior covered bond on Friday and the issuer told The Cover that it was pleased with foreign investors’ response to its inaugural euro offering of what represented “senior debt with a twist”.

Denmark’s Nykredit Realkredit priced a Eu500m long three year junior covered bond on Friday and the issuer told The Cover that it was pleased with foreign investors’ response to its inaugural euro offering of what represented “senior debt with a twist”.

Supply of sizeable euro covered bonds was this week at its lowest since the benchmark market reopened at the end of August, but activity is expected to pick up again next week, with issuers also said to be preparing for issuance in dollars and niche currencies. Meanwhile, Denmark’s Nykredit Realkredit today (Friday) launched an inaugural euro junior covered bond transaction.

*Change relative to end of H1

Moody’s has cut the ratings of Depfa plc and Depfa ACS Bank from A3 to Baa3 following a transfer of assets to the Hypo Real Estate’s wind-down entity, FMS Wertmanagement, that the rating agency said is part of a process whereby the Irish entities will be less likely to enjoy support.

Fitch cut mortgage backed covered bonds issued by Spain’s Cajastur from AAA to AA+ and placed them on Rating Watch Negative yesterday (Thursday), because of a downgrade of the issuer the previous day.

BNP Paribas, Compagnie de Financement Foncier and Crédit Agricole Covered Bonds won the blue riband awards in the EuroWeek and The Cover Covered Bond Awards 2010, which were presented at our fourth annual dinner at the Dolder Grand in Zurich last Thursday (23 September).

Banco Popular Español achieved a high hit rate on an exchange offer that was completed on Monday, with around Eu1.4bn of the Eu3.5bn of bonds eligible for the exercise being swapped into a new Eu1.75bn five year cédulas hipotecarias issue — the maximum that the Spanish bank could raise.

Credit Suisse is close to launching the first issue off a new covered bond programme, which would make it the second Swiss bank to issue a standalone covered bond and the second outside the country’s Pfandbrief Act.

Fitch has improved the Discontinuity Factor assigned to obligations foncières issued by Société Générale SCF because it is satisfied that the issuer could in its own name enter into repo transactions with the European Central Bank in the event of a default of its parent.

The covered bond market is standing on its own two feet after the end of the European Central Bank’s purchase programme, Roberto Schiavi, head of investment division, directorate general market operations at the ECB, told delegates at the ECBC/Euromoney covered bond conference last week. However, he said that he feared a blurring of what counts as a covered bond, an issue also addressed by the ECB in a report yesterday (Wednesday).