Covered Bonds

Settled covered bond purchases under the European Central Bank’s programme grew by Eu243m to reach Eu13.53bn this (Thursday) morning.

ING yesterday (Wednesday) priced a Eu2bn five year covered bond that is the tightest and largest five year or longer benchmark issued outside Germany this year, according to one of the leads.

Moody’s yesterday (Wednesday) changed the outlook on Marfin Egnatia Bank’s Baa1 senior debt rating from stable to positive, but downgraded its bank financial strength rating from D+ to D, on stable outlook.

Stadshypotek this (Thursday) morning reopened the Swedish covered bond segment with a five year benchmark, while Caja Madrid will this afternoon price its first issue of the year, a Eu1.75bn seven year cédulas hipotecarias. Meanwhile, UBS has announced the mandate for its debut.

Banco Comercial Português yesterday (Wednesday) priced its first covered bond benchmark since April 2008, but a full new issue pipeline and a strong performance of outstanding Portuguese covered bonds prompted the issuer to forego a roadshow and a market sounding in preparation of its transaction, according to one of the leads.

Introducing covered bonds would be a good way of weaning Australian banks off government guarantees while retaining rates investors, according to panellists at the Euromoney Australian Debt Capital Markets Forum on Tuesday.

CajaSur has issued the lowest rated Spanish covered bond, a Eu400m five year floating rate note rated A1 by Moody’s. Meanwhile, buybacks announced by La Caixa take its total for this year to more than Eu1.35bn.

A series of new issues at aggressive levels in what could be the busiest ever week in the covered bond market has raised fears among investors that the asset class is facing a bubble.

The cumulative amount of settled covered bond purchases under the European Central Bank’s Eu60bn programme stood at Eu13.287bn this (Wednesday) morning following a Eu417m increase from yesterday’s (Tuesday) figure.

Moody’s yesterday (Tuesday) downgraded Deutsche Hypothekenbank’s long term debt rating from Aa3 to A1.

Fitch yesterday (Monday) downgraded EBS Mortgage Finance’s residential covered bonds from AAA to AA following Friday’s downgrade of the issuer’s rating from BBB to BBB-.

Bilbao Bizkaia Kutxa will this (Tuesday) afternoon price its Eu1bn five year cédulas hipotecarias debut at 58bp over mid-swaps, a “punchy” level that bankers said signalled that pricing expectations might need to be revised tighter. And a tighter level than expected is already being rumoured on the first of several new issues in the pipeline, which includes Dutch, Portuguese and Italian supply.