Covered Bonds

UniCredit Jelzálogbank has dispensed with the A3 rating of its covered bonds because difficult market conditions for CEE issuers have meant that the Hungarian bank is not using an international issuance programme it established in November 2008.

Standard & Poor’s has affirmed the covered bonds of Nationwide Building Society, Banques Populaires, and HSBC Bank at AAA, but downgraded those of Yorkshire Building Society to AA+. An upcoming redemption could lead to positive rating action for Yorkshire, however.

The European Central Bank is ploughing on with its Eu60bn covered bond programme, with Eu1.357bn of purchases reported this week taking the total to Eu37.134bn.

Moody’s has put on review for downgrade Alpha Bank’s Aaa covered bond rating alongside all but one of its Aaa ratings of Greek securitisations.

Rarity value and good name recognition among investors helped Westfälische Landschaft Bodenkreditbank yesterday (Thursday) price a Eu1bn long five year public sector Pfandbrief at the tightest level of any covered bond benchmark for a year-and-a-half. The issuer told The Cover that at such a level a jumbo appearance made sense from several perspectives.

WestLB will price a Eu1bn five year public sector Pfandbrief this (Friday) afternoon on the back of a more muted response from investors than that enjoyed by a similar deal for Westfälische Landschaft Bodenkreditbank yesterday (Thursday).

Moody’s has downgraded Deutsche Postbank’s rating from Aa3 to A1, on negative outlook, because it considers the bank’s risk profile to have increased.

Dexia Municipal Agency broke a lull in the primary market with a Eu1bn eight year obligations foncières issue yesterday (Wednesday) that demonstrated the viability of issuance in spite of the fragile market conditions, with two issuers today (Thursday) following suit and another announcing a mandate.

Benchmarks launched this (Thursday) morning for BNP Paribas Public Sector SCF and Westfälische Landschaft Bodenkreditbank were two and three times oversubscribed, respectively. Such strong support, notably from German accounts, enabled the Pfandbrief to become the first jumbo priced in the single-digits over mid-swaps since August 2008, and another deal has already been announced.

Barclays Capital’s Asian expansion into investment banking, prompted suggestions that it could be distracted from its traditional focus on credit. A string of debt mandates refutes those charges, but rivals are growing stronger and fees are under pressure. Andy Jones, Barclays Capital’s co-head of global finance and risk solutions in Asia Pacific, tells Matthew Thomas how he hopes to get one up on the competition without getting into a fight.

Standard & Poor’s yesterday (Tuesday) downgraded Alpha Bank’s covered bonds from AAA to AA- in its first rating action on a Category 3 covered bond programme. The downgrade to the Greek bank’s programme is the biggest cut so far under the rating agency’s new methodology.

Dexia Municipal Agency is today (Wednesday) bookbuilding for an eight year obligations foncières issue that is the first benchmark covered bond of the week, and Dexia’s first since the European Commission approved the group’s restructuring plan earlier this month.