Covered Bonds

Settled purchases under the European Central Bank’s covered bond programme stood at Eu59.549bn this (Friday) morning, but given a time lag between purchases being made and reported, it is possible that the Eu60bn earmarked for the scheme may has already been spent.

National Bank of Greece has set up a second covered bond programme “as part of its strategic planning for optimal use of its balance sheet and development of contingent liquidity”, it said yesterday (Thursday).

Standard & Poor’s today (Friday) downgraded the long term rating of ABN Amro from A+ to A, on stable outlook, in advance of the bank’s merger with Fortis Bank Nederland on 1 July. Fitch on Wednesday said that it expects to affirm ABN Amro’s rating on completion of the merger, but cut the bank's individual rating.

Bookrunner UBS priced Caisse de Refinanciement de l’Habitat’s inaugural Swiss franc deal on Thursday at what it agreed was a demanding level.

Eurohypo yesterday (Wednesday) priced a Eu500m four year mortgage-backed Pfandbrief, the fourth sub-Eu1bn deal of six sizeable issues launched this week. Meanwhile, HSH Nordbank plans to access the benchmark covered bond market.

Eurohypo is today (Wednesday) sizeing a four year Pfandbrief at Eu500m, the lower end of a targeted size range, in response to muted demand in a market where Eu4.25bn of supply has hit the market in a day-and-a-half.

Banca Monte dei Paschi di Siena, the world’s oldest banking group, yesterday (Tuesday) publicly inaugurated its Eu10bn Italian covered bond programme with a five year issue that achieved a targeted size of Eu1bn.

Plans for US covered bond legislation have been included in the House of Representatives’ offer to the conference responsible for coming up with a financial reform bill unifying the versions approved by the Senate and the House.

Fitch yesterday (Monday) affirmed at AA- and removed from negative review mortgage-backed Pfandbriefe issued by Corealcredit, one of eight issuers whose mortgage covered bonds were placed on Rating Watch negative in January because of concerns over credit risk posed by their commercial real estate exposure and limited information on collateral.

Fitch has downgraded BNP Paribas from AA to AA-, on stable outlook, because the bank “no longer fits comfortably alongside a peer group of more highly rated banks”.