Covered Bonds

Caisse de Refinancement de l’Habitat is today (Monday) increasing a 5% October 2013 issue by Eu410m at a level described as “aggressive” by a syndicate official on the deal. Meanwhile, Banco Espírito Santo is expected to hit the market before mid-week holidays in the US and France.

Source: Dealogic. Data includes jumbo issues in euros, $1bn minimum issues in dollars and C$750m minimum issues in Canadian dollars ; excludes retained deals under Dealogic criteria.

Source: Dealogic. Data excludes retained deals under Dealogic criteria.

The European Central Bank appears to have redoubled its support for new covered bond issuance in October, with a monthly report on its Eu60bn programme published yesterday (Thursday) suggesting that its share of primary market issuance has risen from 7.5% to 13.6%. A drop in secondary market purchases also suggests a change to its approach.

A Eu1bn five year cédulas hipotecarias priced for Caja Madrid yesterday (Thursday) brought the number of benchmark issues from Spain launched since the beginning of September to 10, representing a concentration of activity unmatched by recent supply from other jurisdictions.

Moody’s yesterday (Thursday) downgraded DLR Kredit’s issuer rating from A1 to A3 under the rating agency’s new methodology for rating financial institutions that specialise in issuing covered bonds on behalf of an owner bank or a group of banks.

Pfandbriefbank schweizerischer Hypothekarinstitute raised Sfr825m (Eu564m) in the Swiss franc market on Monday through a three tranche issue.

Lorenz Altenburg has left Société Générale’s syndicate desk, where he was a key member of the bank’s covered bond team, to help develop SG’s trading effort.

Bankinter priced a Eu1bn five year cédulas hipotecarias on Tuesday, almost exactly six months before the maturity date of the last benchmark it launched, a Eu1.5bn two year deal. The issuer told The Cover that it decided it would play it safe by prefunding.

Compagnie de Financement Foncier was able to increase the size of a long two year deal yesterday (Wednesday) afternoon and price it at the tight end of guidance, despite coming at the tightest level for a covered bond benchmark this year. Meanwhile, CRH is tapping a long dated deal in the wake of Dexia Municipal Agency earlier this week.

The European Central Bank reported a Eu51m increase in total settled covered bond purchases this (Thursday) morning, ahead of the publication of its fourth monthly report on the Eu60bn programme, which should follow the governing council meeting today.

Caja Madrid is in the market with a Eu1bn five year benchmark covered bond that is being marketed at 70bp-75bp over mid-swaps, wider than where the bank sold a Eu1.75bn seven year at the end of September.