Covered Bonds

Fitch affirmed public sector-backed Pfandbriefe of Düsseldorfer Hypothekenbank at AAA yesterday (Tuesday), and removed them from Rating Watch Negative, following an annual review of the programme.

Fitch has reviewed the spread assumptions it applies to quantify the liquidity risk of sovereign debt backing covered bonds, increasing the stresses for certain exposures, such as to southern European countries, while maintaining others unchanged, it said yesterday (Monday).

Standard & Poor’s yesterday (Monday) affirmed under its revised rating methodology public sector-backed covered bonds issued by Ireland’s Depfa ACS Bank at AA, on stable outlook, and removed them from CreditWatch developing.

Standard & Poor’s has cleared at AAA, on stable outlook, mortgage covered bonds issued by Swedbank Mortgage and removed them from negative review.

Standard & Poor’s is assessing the possible impact on Greek covered bonds of a Greek personal bankruptcy law that will enter into effect at the beginning of September, the rating agency said on Friday.

The Association for Financial Markets in Europe/European Securitisation Forum has called on the US Securities & Exchange Commission to exempt covered bonds issued under Rule 144A from Regulation AB, under which the SEC is proposing moves aimed at increasing investor protection in asset-backed securities.

Syndicate bankers are identifying the last week of August as when new benchmark covered bond supply is likely to resume, but are not ruling out an end of the summer break as early as next week.

A poll of delegates at a recent Moody’s investor briefing found almost half to be sceptical about covered bonds being a viable alternative to residential mortgage-backed securities in the US. However, in a discussion that followed, panellists argued that the asset class could prove complementary to RMBS.

The European Central Bank criticised a proposed waiver in CRD III allowing the senior tranches of self-originated MBS to be used as collateral for covered bonds on Monday, surprising many market participants, who said that the criticism appears to be due in part to a misunderstanding.

The availability for lending of the Eurosystem’s covered bond purchase programme portfolio probably gives market participants confidence in the functioning of the market, the European Central Bank said today (Thursday).

Martti Porkka is stepping down as managing director of Aktia Real Estate Mortgage Bank in the autumn and will leave the Finnish covered bond issuer next year.