Covered Bonds

Standard & Poor’s yesterday (Thursday) withdrew its ratings of Achmea Hypotheekbank’s covered bond programme after downgrading it from AAA to AA+, on stable outlook, under its revised rating methodology.

Fitch yesterday (Wednesday) cut mortgage-backed covered bonds issued by Banco Popular Español from AAA to AA+ following a downgrade of the issuer.

Standard & Poor’s yesterday (Wednesday) downgraded public sector-backed covered bonds issued by Portugal’s Banco BPI by five notches, from AAA to A, under its revised rating methodology. Meanwhile, Moody’s has cut the issuer ratings of eight Portuguese banks, including the country’s six covered bond issuers.

Compagnie de Financement Foncier yesterday (Tuesday) sold a $1.8bn (Eu1.4bn) two year dual tranche 144A issue, its second US targeted dollar benchmark covered bond this year and the first to be launched off a new US MTN programme.

Earlier this week we discussed the implications of the rise of sizeable but sub-Eu1bn issuance on the covered bond market. Today we invite comment on the potential impact of these deals on the way in which we reflect and analyse the market, not least in league tables.

Fitch yesterday (Tuesday) downgraded the long term rating of Banco Popular Español from AA- to A, on stable outlook, because of deterioration in the bank’s asset quality and its effect on operating profitability.

Fitch yesterday (Monday) downgraded the long term rating of HSH Nordbank from A to A-, and left it on negative review, in expectation of a reduction in ownership by Hamburg and Schleswig-Holstein.

Mortgage-backed securities will remain eligible as collateral for covered bonds, albeit subject to new conditions, after the European Parliament passed amendments to the Capital Requirements Directive. An 11.25% loss given default value for covered bonds has meanwhile been cemented.

Ultimately, it was not to be. Der Pfußball deflated even before a Spaniard had been kicked in anger, and in the final Dutch covered bonds proved less than totaal. But who is this manager who has taken cédulas tiki-taka to the heights of the World Covered Bond Council?