Covered Bonds

Moody’s yesterday (Wednesday) downgraded BNP Paribas’s senior debt rating from Aa1 to Aa2, on stable outlook, to capture tail risks from the bank’s investment banking operations and continuing pressure on asset quality from loan books.

The Covered Bond Investor Council questioned the practice of building shadow order books based on price whispers and urged issuers to return to traditional bookbuilding methods in a statement released this (Thursday) afternoon. Click through for the full statement.

Dexia Municipal Agency took advantage of a back-up in yields to yesterday (Wednesday) price a Eu1bn 12 year covered bond.

Standard & Poor’s will no longer rate Landesbank Baden-Württemberg’s Pfandbriefe or other debt after the German bank ended its contract with the rating agency. The covered bond issuer is believed to be the first to have done so since S&P announced its controversial new rating methodology on 16 December.

Crédit Agricole has closed the order books for a three year benchmark covered bond that will be priced at the tight end of guidance on the back of Eu3bn of orders.

Dexia Municipal Agency has launched a 12 year obligations foncières issue, the longest dated benchmark covered bond of the year, with the order books clearing the Eu1bn mark earlier this (Wednesday) morning. Meanwhile, Lloyds TSB has completed a non-deal roadshow for its covered bond programme.

Banco Santander closed the books on a Eu1bn five year cédulas hipotecarias issue yesterday (Tuesday) afternoon after five-and-a-half hours of bookbuilding, with orders only just matching the deal size.

Banco Santander opened books on a five year cédulas hipotecarias with guidance of the 50bp over mid-swaps area this (Tuesday) morning, surprising market participants because a 10 year issue had initially been expected. Meanwhile, Dexia Municipal Agency is said to be preparing a 12 year benchmark.