Covered Bonds

Standard & Poor’s yesterday (Thursday) downgraded mortgage covered bonds issued by Banco BPI by four notches, from AAA to A+.

Fitch yesterday (Thursday) downgraded Caja Madrid’s rating from A+ to A, on negative outlook, because of revenue pressure and a decline in asset quality.

Toronto-Dominion launched a $2bn five year inaugural covered bond yesterday (Thursday), becoming the fifth Canadian bank to tap the dollar market with a covered bond this year. Compagnie de Financement Foncier today launched the fourth euro tap of the week, increasing its recent 15 year deal by Eu450m.

Banco Bilbao Vizcaya Argentaria priced the first benchmark bond for a Spanish bank in three months on Monday, selling a Eu2bn three year covered bond on the back of improved sentiment for Spanish debt and a record re-offer spread.

Fitch downgraded five Portuguese banks, including Banco Comercial Português, Banco Espírito Santo and Banco BPI yesterday (Thursday), because it considers them to have limited funding sources and a reduced ability to raise medium term funding.

Moody’s yesterday (Wednesday) cut Ireland’s EBS Building Society from A2 to A3, on stable outlook, after having on Monday downgraded the sovereign by one notch.

Standard & Poor’s has, under its revised rating methodology, downgraded covered bonds issued by Bradford & Bingley from AAA to AA, on stable outlook, because of a high proportion of buy-to-let loans in the cover pool.

Moody’s put all ratings of Bilbao Bizkaia Kutxa on review for downgrade today (Wednesday) because of its proposed acquisition of Cajasur, which was taken over by Spain’s Fund for Orderly Bank Restructuring (FROB) in May.

Moody’s downgraded four Portuguese covered bond programmes yesterday (Tuesday) after last week cutting the ratings of their issuers on the back of a sovereign downgrade. Two remain on review for downgrade alongside three that have not yet been lowered.

Yorkshire Building Society covered bond-holders passed a resolution to remove Standard & Poor’s from the documentation of the issuer’s covered bond programme yesterday (Tuesday).

Banco Bilbao Vizcaya Argentaria yesterday (Monday) received Eu3.1bn of orders for a covered bond that was marketed at a level designed to ensure “certainty of execution”, according to bankers at the leads.

Criteria: league table includes credit for all fixed rate, public market, euro-denominated covered bonds of at least Eu500m and with at least three lead managers. *Change versus euro jumbos H1 2010 ranking.