Covered Bonds
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Fitch on Friday revised the outlook on National Bank of Greece’s rating from negative to stable, citing the bank’s resilient operating profitability in the face of a challenging operating environment.
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A pipeline low on mandated deals scheduled for imminent launch is pointing to a quiet week for covered bonds, although this could change as certain issuers emerge from blackout periods. Meanwhile, others are progressing steadily through preparations for new issues.
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The European Central Bank’s sixteenth full week of reporting has concluded with a modest Eu53m increase to edge the total of settled covered bond purchases to Eu20.468bn this (Friday) morning. -
Banca Carige on Wednesday positioned itself in the benchmark covered bond market for the first time, with a Eu1bn seven year issue. As a mid-sized regional bank that is primarily funded by deposits, it had to overcome weak name recognition, but the issuer told The Cover that it is satisfied with the reception its benchmark received in the end.
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Royal Bank of Canada yesterday (Thursday) became the first Canadian bank to sell a Canadian dollar denominated covered bond when it priced a C$750m five year issue. The transaction has left covered bond bankers in Europe puzzling over RBC’s rationale for the initiative, citing pricing that offered limited savings compared to senior unsecured debt.
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A Eu500m three year deal for Dexia’s Luxembourg covered bond issuer yesterday (Wednesday) reopened the Luxembourg benchmark lettres de gage market that had lain dormant since November 2006. The investor response to the issue was “overwhelming” and bodes well for further issuance in the format, said the issuer.
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The European Central Bank this (Thursday) morning reported the smallest increase in total settled covered bond purchases since its Eu60bn programme began.
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The European Commission yesterday (Wednesday) gave the green light for the UK government to proceed with its proposed restructuring of Northern Rock into a “good” bank and a “bad” bank. Mortgages backing the issuer’s covered bonds will be allocated to the “bad bank”, which will remain government guaranteed following the restructuring.
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The European Central Bank reported a Eu166m increase in total settled covered bond purchases this (Wednesday) morning, a day after settlement of the last of recently launched public issues eligible for the scheme.
