Covered Bonds

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.

Banco Pastor yesterday (Tuesday) became the seventh Spanish issuer to tap the covered bond market in just under three weeks, and the issuer told The Cover that it was “delighted” with the transaction and suffered no ill effects from one lead manager dropping out.

Banco Popular Español launched an exchange offer yesterday (Monday) featuring the first ever swap of senior unsecured debt into covered bonds.

Five issuers piled into the euro covered bond market in one of its busiest ever sessions this (Tuesday) morning to take advantage of supportive conditions. Supply included the first deals in a maturity longer than 10 years since June.

At least three issuers are understood to be preparing to launch sizeable new covered bonds this week despite no deals being live on the first morning of a working week for the first time since the benchmark market reopened in August. Meanwhile, Dexia has announced spreads on three new benchmarks it is offering as part of an exchange.