Covered Bonds

Banco Pastor yesterday (Thursday) launched a Eu1bn four and a half year cédulas hipotecarias in its first visit to the jumbo covered bond market since September 2006. The issue is the first not to have been priced at the tight end of guidance since the market reopened after the summer break, but the issuer told The Cover that it is happy with the level.

Total settled covered bond purchases reported by the European Central Bank this week reached Eu1.366bn, the third highest weekly tally of reported daily increases, after an increase this (Friday) morning of Eu34m.

In brief: Calyon has hired a veteran covered bond banker from Commerzbank/Dresdner Kleinwort, The Cover understands.

The European Central Bank this (Thursday) morning disclosed an increase of Eu497m in the total of covered bond purchases that have settled under its purchase programme. The increase takes the running total to Eu10.963bn.

The execution of the Bank of Ireland’s Eu1.5bn covered bond priced yesterday (Wednesday) afternoon was the culmination of a process set in motion by the announcement of the European Central Bank’s Eu60bn purchase programme in early May, the issuer told The Cover, that allowed it to reopen the market for unguaranteed Irish issuance.

Banco Pastor is pricing a Eu1bn four and a half year cédulas hipotecarias issue this (Thursday) afternoon at 75bp over mid-swaps, after confirming the mandate for its new issue yesterday (Wednesday) afternoon.

Uruguay’s parliament on Tuesday passed a new covered bond law, The Cover has learnt.

Bank of Ireland as good as signalled the complete recovery of the covered bond market, in terms of access at least, by launching a Eu1.5bn five year deal that is the first Irish issue in the public markets since June 2007. And while spreads for such issuers may remain at unprecedented levels, the strong rally is nevertheless encouraging many credits to explore possible new issues.

The running total of settled covered bond purchases made under the European Central Bank’s programme stands at Eu10.466bn this (Wednesday) morning, up from Eu10.324bn yesterday (Tuesday).

Moody’s yesterday (Tuesday) downgraded several Scandinavian financial institutions that either issue covered bonds or are closely linked to issuers, concluding reviews for possible downgrade that were initiated on 22 July.