Covered Bonds

Banca delle Marche hopes to issue its first covered bond when the market reopens after the summer break, a funding official at the bank told The Cover.

Fitch affirmed Cédulas TDA 14 at AAA, on stable outlook, yesterday (Thursday), in spite of a downgrade last week of Caja Madrid and its cédulas hipotecarias, to which Cédulas TDA 14 is heavily exposed.

Fitch downgraded IM Cédulas 1 Grupo Banco Popular’s mortgage backed covered bonds from AAA to AA, on stable outlook, yesterday (Thursday) because of a downgrade of Banco Popular Español’s rating from AA- to A.

Moody’s cut public sector-backed covered bonds issued by Kommunalkredit Austria from Aaa to Aa1 today (Friday) and placed them on review for further possible downgrade while it assesses a proposal from the issuer to increase “committed” overcollateralisation levels.

Standard & Poor’s affirmed Alpha Covered Bond programme at A-, on negative outlook, on Wednesday, and removed it from CreditWatch negative.

The oversight body of the Basel Committee on Banking Supervision has ruled that covered bonds are eligible for the new regulatory liquidity buffers, subject to 15% haircuts and other restrictions, under an agreement reached Monday.

Banques Populaires yesterday (Wednesday) priced a Eu340m increase to a 2.625% June 2015 covered bond at 50bp over mid-swaps, in line with guidance.

The European Central Bank is moving structured covered bonds from category IV to III of its collateral framework, meaning that they will have more lenient haircuts.

The House Financial Services Committee passed the United States Covered Bond Act of 2010 yesterday (Wednesday) in a quick markup after some concessions were made to the Federal Deposit Insurance Corporation. However, a compromise over how overcollateralisation should be treated has not yet been reached.

Moody’s yesterday (Wednesday) downgraded covered bonds of four Portuguese banks because of the negative impact on its expected loss analysis of downgrades of the issuers.

Canadian Imperial Bank of Commerce took its covered bond funding in the US market this year to $4.25bn (Eu3.27bn/C$4.39bn) yesterday (Tuesday), increasing its two outstanding 144A issues by a combined $1bn. Meanwhile, French taps in euros continued with Banques Populaires Covered Bond.

The transfer of CajaSur’s assets and liabilities to Bilbao Bizcaya Kutxa will have a positive effect on the multi-cédulas exposed to CajaSur, and a neutral impact on those exposed to BBK, Fitch said today (Wednesday). The multi-cédulas are among 48 on Rating Watch Negative, which Fitch aims to resolve in the next two months.