Covered Bonds

A Eu1bn five year cédulas hipotecarias for Banco Bilbao Vizcaya Argentaria priced at the wide end of guidance could signal a welcome leveling of the balance of power between investors and issuers in the covered bond market, according to one banker this (Wednesday) morning. Meanwhile Danske is in the market with a new issue, National Bank of Greece has completed the first Greek benchmark, and we include here a wrap-up of some distribution statistics from earlier in the week. [Updated to correct BBVA pricing.]

A Eu375m increase in settled covered bond purchases reported this (Wednesday) morning took the running total of buying under the European Central Bank’s Eu60bn programme to Eu14.959bn.

Barclays reopened the UK covered bond market with the first issue since October 2007 yesterday (Tuesday) and did so in style, pricing a Eu2bn 10 year issue at a level tighter than many market participants had until then thought possible.

A selection of pictures from the Euromoney/European Covered Bond Council Covered Bond Congress at the Bella Center in Copenhagen on 17 September.

Royal Bank of Scotland is considering joining the ranks of UK covered bond issuers, an official at the bank told The Cover after the registration of RBS Covered Bonds (Holdings) Ltd yesterday (Tuesday).

SNS Bank hopes that by the end of October its covered bond programme will be registered with the Dutch central bank and compliant with the Capital Requirements Directive, an official at the issuer told The Cover. And, market conditions permitting, NIBC could launch its first public covered bond at the beginning of October, according to an official at the bank.

Investors’ enthusiasm for UBS’s inaugural Swiss covered bond on Monday vindicated the bank’s decision to enter the market and allowed it to achieve its main goals, officials at the bank told The Cover yesterday (Tuesday).

Banco Bilbao Vizcaya Argentaria is understood to have gathered more than Eu1bn of orders for a five year issue that is officially being marketed at 28bp-30bp over mid-swaps.

Barclays Bank is expected to price its debut, 10 year covered bond at 60bp over mid-swaps, the tight end of official 60bp-65bp guidance. Already another UK bank has mandated for a new covered bond in what could be the second busiest week ever in the market.

Danske Bank has mandated BNP Paribas, HSBC and UniCredit to manage a new issue alongside itself. The banks are in discussion with clients about a potential six year transaction, said a syndicate official at one of the leads.

Daily average buying of covered bonds under the European Central Bank’s programme reached its highest level in over a month today (Tuesday), following a Eu346m increase in total settled purchases reported by the ECB this morning.

National Bank of Greece will price the first Greek covered bond benchmark tomorrow (Wednesday) morning, a Eu1.5bn seven year issue at 90bp over mid-swaps.