Covered Bonds

The European Central Bank made the right decision when choosing to participate, to a restricted amount, in the covered bond market, said Axel Weber, president of the Deutsche Bundesbank yesterday (Thursday), even if the Eu60bn purchase programme has not brought about a broad improvement in secondary market liquidity.

The European Central Bank reported a Eu156m increase in total settled purchases under its covered bond programme this (Friday) morning, bringing the week’s total to Eu1.075bn.

The Deutsche Bundesbank cited the bailout of Hypo Real Estate and the Eurosystem’s Eu60bn purchase programme as reasons why the covered bond market has suffered less stress than other market segments over the past two years, in its Financial Stability Review 2009 published yesterday (Wednesday). Meanwhile, settled covered bond purchases under the programme reached Eu24.979bn today (Thursday), the 100th day of reporting.

Caisse de Refinancement de l’Habitat today (Thursday) increased an April 2019 benchmark covered bond by Eu105m through Landesbank Baden-Württemberg, taking advantage of good investor interest for 10 year paper.

Ahorro Corporación Financiera launched the largest 10 year Spanish covered bond since July 2007 yesterday (Tuesday), a Eu500m AyT Cédulas Cajas issue. An ACF official told The Cover that the size matched investor and savings bank interest in the transaction.

Henry Davis York, a Sydney-based law firm, has established what it says is the first covered bond legal team in Australia, even though issuance is prohibited by the country’s regulator.

SpareBank 1 Boligkreditt priced the first Norwegian jumbo since September 2008 yesterday (Tuesday) afternoon, a Eu1bn three year deal that the issuer told The Cover made good on its commitment to benchmark covered bond issuance every year.

A Eu239m increase has taken total settled covered bond purchases under the European Central Bank’s Eu60bn programme to Eu24.797bn this (Wednesday) morning.

The Cover will next week be opening a poll to find out which covered bond issue from 2000 to 2009 market participants consider deserving of the title “covered bond of the decade”. We have chosen 21 deals as a provisional shortlist, but are keen to have readers’ nominations.

Jean-Claude Trichet, president of the European Central Bank, cited the volumes and spread performance of cédulas issued since its Eu60bn covered bond programme was announced as evidence of its effectiveness yesterday (Monday). Meanwhile, total settled purchases under the programme rose Eu388m overnight to reach Eu24.558bn this (Tuesday) morning.

New issues from Spain and Norway launched this (Tuesday) morning after UBS’s second benchmark covered bond yesterday (Monday) are making this week busier than most market participants had been expecting.

Note: Two increases this year to Caisse de Refinancement de l’Habitat’s 4.25% October 2014 issue, which had previously been included, have been excluded because they do not meet Dealogic’s criteria for euro jumbo covered bonds.