Covered Bonds

The European Central Bank this week reported fewer covered bond purchases under its Eu60bn programme than at any time since the start of the year.

Austria’s Bawag PSK and France’s Crédit Mutuel Arkéa finish covered bond roadshows today (Friday), and will early next week assess investors’ feedback to see if new issues makes sense.

Banca Carige’s outlook has been changed from negative to stable by Fitch, which said yesterday (Thursday) that the Italian bank should remain well positioned in a challenging operating environment.

Standard & Poor’s has affirmed the AAA ratings of the mortgage covered bond programmes of Bank of Scotland and Lloyds TSB Bank, on stable outlook.

EuroWeek was honoured to host our third annual bond market awards dinner on Thursday evening. Everyone here at EuroWeek would like to thank those who attended and congratulate the winners and nominees, listed below and including two very special Services to the Markets awards. The awards were determined by a poll of bankers and borrowers undertaken by EuroWeek in April and May. Please contact Toby Fildes (tfildes@euroweek.com) if you would like to know more about the awards.

The great and the good of the global bond markets joined EuroWeek on Thursday night for its 2010 Bond Dinner at the Royal Courts of Justice in London. Over 350 top borrowers and bankers from across the SSA, FIG, corporate, MTN and EM sectors filled the Great Hall. Key awards were given out including best sovereign borrower, best FIG funding official, best emerging market borrower and best corporate funding official. For the full list of our awards, please see page 56.

UniCredit Bank launched a new, Eu500m Pfandbrief issue this (Thursday) morning, despite markets being preoccupied with understanding the implications of a ban on uncovered short-selling of euro-zone government bonds and on naked CDS imposed on German banks by BaFin. But covered bond issuers outside Germany remain put out by the unilateral German initiative.

Norway’s Møre Boligkreditt is today (Thursday) selling a Nkr800m (Eu100.26m) seven year floating rate note, its second publicly launched covered bond. Moody’s has assigned the covered bonds a definitive Aaa rating, which the issuer told The Cover was important for reaching an international investor base.

The Reserve Bank of New Zealand will be launching a consultation on the development of a covered bond policy in the coming months.

A merger of Caixa Catalunya, Caixa Manresa and Caixa Tarragona approved by the banks on Monday will create a new entity that will be the fourth largest Spanish savings bank. The transaction is the first major savings bank merger approved by the Bank of Spain and the European Commission, according to Caixa Catalunya.

Germany’s Federal Financing Supervisory Authority (BaFin) banned uncovered short-selling of euro-zone government bonds and their CDS by German banks as of midnight last night, raising fears that liquidity in covered bonds would be hit and a reopening of the benchmark market delayed.

The European Central Bank said yesterday (Monday) that purchases under its Securities Markets Programme that had settled as of last Friday (14 May) totalled Eu16.5bn, dwarfing activity under its covered bond purchase programme.