Covered Bonds

The Bank of England today (Wednesday) issued a consultation paper proposing enhanced disclosure requirements for asset-backed securities and covered bonds accepted in its operations, saying that this is necessary not only for itself but also for market-wide transparency.

Berlin-Hannoversche Hypothekenbank will today (Wednesday) price a Eu600m six year Pfandbrief at the tight end of guidance. It takes past Eu6bn the amount of Eu500m-plus issues to have hit the market this week, coming after benchmarks for issuers such as ING Bank and Crédit Agricole.

Länsförsäkringar Hypotek fulfilled a long-established ambition of diversifying its funding sources by yesterday (Tuesday) launching an inaugural, Eu1bn five year euro covered bond, the issuer told The Cover.

Eurohypo Luxembourg yesterday (Tuesday) launched a Eu750m three year public sector lettres de gage transaction a week earlier than planned in response to an issuance window that manifested itself quickly, the issuer told The Cover.

The European Covered Bond Council is preparing to submit comments on consultation papers issued by the Basel Committee on Banking Supervision and the European Commission that set out the role covered bonds may play as part of new definitions of liquidity standards.

Strong demand for a Eu1bn seven year covered bond for Swedbank Mortgage priced yesterday (Monday) reflected growing investor confidence in Swedbank’s efforts to improve its credit story, the issuer told The Cover.

All four institutions that had indicated that they would come to market this week opened their order books today (Tuesday), but had little trouble achieving price and size targets in the middle of or better than those being aimed for.

Nykredit is today (Tuesday) nine days into an auction of Danish covered bonds and mortgage bonds that lasts until Thursday and is intended to reduce the volume of bonds that are refinanced during the country’s traditional end-of-year auctions. Ten times more is being auctioned than last March.

Fitch downgraded covered bonds issued by Marfin Egnatia Bank from AA+ to AA on Friday.

The Council of Mortgage Lenders has published a budget submission to HM Treasury calling for the UK authorities to signal their support for covered bonds and residential mortgage-backed securitisation, and explain how the end of funding through the Bank of England’s Special Liquidity Scheme and the Treasury’s Credit Guarantee Scheme will be dealt with. Meanwhile, a new industry body is being created to focus on funding UK mortgage lending.