Covered Bonds

Compagnie de Financement Foncier negotiated a tricky turn in the market to launch the largest three year covered bond since May 2008 yesterday (Tuesday). The issuer told The Cover that the deal’s size reflected the strong demand it encountered, especially from Asian and central bank buyers.

Banco de Sabadell on Monday returned to the benchmark covered bond market after an absence of more than a year-and-a-half. The issuer told The Cover that it announced its deal after watching the market get off to a strong start, and is confident that, after a spell of market indigestion, its issue will perform in the long run.

DnB Nor Boligkreditt launched its first issue for a year-and-a-half and longest dated covered bond benchmark on Monday and the issuer told The Cover that it had accelerated its issuance plans to take advantage of the strong market reopening and pricing on offer.

The benchmark covered bond market is today (Wednesday) set to break through the previous record for issuance in a week, with HSBC Covered Bonds and UBS having launched seven and three year deals, respectively, and Abbey understood to be whispering a five year issue.

Two issuers are understood to be building shadow order books today (Tuesday) in spite of the benchmark covered bond market having suffered its most difficult 24 hours since the flood of issuance began a week ago.

Lloyds TSB Bank’s Eu15bn global covered bond programme has been added to the UK’s Regulated Covered Bond register.

Deutsche Pfandbriefbank yesterday (Monday) built a Eu1.1bn order book for its third benchmark covered bond since the restructuring of Hypo Real Estate Group, a Eu1bn seven year public sector Pfandbrief. The level of oversubscription was not particularly high, the issuer told The Cover, but investor demand was strong enough to allow Pfandbriefbank (pbb) to hit its target.

Data includes jumbo issues in euros, $1bn minimum issues in dollars and C$750m minimum issues in Canadian dollars.

Three issuers announced mandates this (Monday) morning, ensuring that the pipeline remains bulging even after three issuers closed books on new issues, as the pace of supply showed no sign of relenting in the second week of the new year.

Standard & Poor’s has taken the first actions under its new covered bond rating methodology, affirming six programmes’ AAA ratings.