Covered Bonds

Christophe Frankel has left Compagnie de Financement Foncier to become chief financial officer and deputy chief executive officer of the European Financial Stability Facility (EFSF).

ING Bank launched the first Eu1bn-plus covered bond issue of the autumn season this (Monday) morning, with DnB Nor Boligkreditt announcing a new benchmark afterwards. At least one more mandate is expected soon, but some bankers said that the restraint being shown by issuers was encouraging.

Russian banks are said to be preparing covered bonds for launch this autumn, after a “breakthrough” issue under the country’s mortgage securities legislation was sold last December. Some market participants are hopeful that this activity will also help advance legislative reform.

Terra Boligkreditt reopened the covered bond market with a Eu500m issue this (Friday) morning that bankers said bodes well for an expected surge in issuance over the coming weeks.

Moody’s assigned an A3 rating, on stable outlook, to Norway’s Sparebanken Sør yesterday (Thursday).

We have uploaded and published in a Google Motion Chart for your perusal issuance volumes before and during the European Central Bank’s covered bond purchase programme. Don’t worry if you haven’t used this tool before; we have produced a video introduction for Motion Chart and CBPP novices.

An introductory video for users new to Google Motion Charts or to the European Central Bank covered bond purchase programme, published in parallel with our article linking to a web page where users can manipulate a chart showing spreads and issuance before and during the CBPP. (Using your browser to enlarge the web page will make the video clearer; this can be done in Internet Explorer by clicking on the magnifying glass in the bottom right-hand corner.)

Several foreign banks are closely investigating the possibility of opening a bank in Germany as a prelude to being able to issue Pfandbriefe, an endeavour that has become more attractive as a result of a funding advantage that the German covered bond product has gained over the past several years, Jens Tolckmitt, chief executive of the Association of German Pfandbrief Banks, told The Cover.

Standard & Poor’s yesterday (Wednesday) upgraded mortgage covered bonds issued by Portugal’s Banco BPI from A+ to AA, on stable outlook, because of improvements in the programme’s cash flow profile and higher overcollateralisation.

Treasury Secretary Tim Geithner referred to covered bonds in opening remarks at a conference on the future of housing finance in the US held yesterday (Tuesday) by the Treasury and Department of Housing and Urban Development (HUD).

The first publicly announced covered bond mandate since the middle of July hit the screens today (Wednesday), with Norway’s Terra Boligkreditt announcing that it has hired banks to carry out investor meetings. And despite a lack of other public plans, syndicate bankers are eying next week for the resumption of new issue activity.