Covered Bonds

Settled covered bond purchases under the European Central Bank’s Eu60bn programme rose Eu137m this (Friday) morning, taking the week’s total to Eu976m. Two taps executed this week constitute the only benchmark supply potentially eligible for the scheme before the year-end.

Swedbank is guaranteeing covered bonds issued by Swedbank Mortgage as part of a “general, unconditional and irrevocable” guarantee of the issuer to maintain the mortgage bank’s A2 rating from Moody’s, which was affirmed today (Friday).

We are delighted to be able to bring you exclusively the premiere of Jean-Luc Covered’s seasonal short film, “Do you believe in Father Christmas?”, starring The Cover’s man of the year. (This video requires YouTube streaming and sound.)

Standard & Poor’s today (Friday) downgraded DnB Nor’s long term counterparty credit rating from AA- to A+, on stable outlook, because of “sharply” deteriorating asset quality this year.

Moody’s has confirmed the Aaa rating of mortgage-backed covered bonds issued by Alpha Bank Covered Bond plc because of two credit enhancements to the programme. Standard & Poor’s today (Friday) took rating actions on two Greek covered bond issuers because it downgraded the sovereign’s rating earlier this week.

Covered bonds are listed alongside high quality corporate bonds rather than high quality government bonds in a consultative document released today (Thursday) by the Basel Committee on Banking Supervision on a new international framework for liquidity risk measurement, standards and monitoring.

The European Central Bank reported the first above average daily increase in settled covered bond purchases under its programme in 12 days today (Thursday).

Standard & Poor’s yesterday (Wednesday) released a long-awaited revision to its criteria for assessing asset-liability mismatch risks for its covered bond ratings, but although the rating agency made welcome changes to its original proposals, many market participants – not just issuers, but also investors – were disappointed by the final result.

Breaking news: Standard & Poor’s today (Wednesday) released its revised criteria for assessing asset-liability mismatch risk for its covered bond ratings, and placed 98 covered bond programmes on CreditWatch. We include below S&P’s full announcement.

Democrat and Republican members of the House Financial Services Committee welcomed an initiative to establish covered bond legislation during a full hearing yesterday (Tuesday), highlighting the contribution the asset class could make towards reviving and growing the US mortgage market without the need for costly government support.

Christine Lagarde, French minister for the economy, industry and employment, today (Wednesday) presented a draft law to the council of ministers that would accommodate French covered bonds issued outside the country’s obligations foncières framework.

Fitch has assigned an improved Discontinuity Factor to Alpha Covered Bond plc’s covered bonds because the issuer has lengthened the extendible maturity period from 12 months to 10 years. However, the covered bonds’ AAA rating remains on rating watch negative, the rating agency said yesterday (Tuesday).