Covered Bonds

Eurohypo on Wednesday launched its first public sector jumbo Pfandbrief in over two years, a Eu1bn five year deal that was priced at 12bp over mid-swaps. A book in excess of Eu1.5bn underwhelmed some market participants away from the deal, but the issuer told The Cover that it was executed at the right price.

ING Bank NV has been downgraded from AA- to A+ by Standard & Poor’s, reflecting the rating agency’s expectation that the Dutch group will report a loss in 2009 after a relatively weak first half performance.

An extraordinary resolution to allow the continued involvement of Lloyds TSB Bank as standby account bank in Northern Rock’s covered bond programme was passed at an investors’ meeting held this Tuesday, The Cover understands.

Jean-Claude Trichet, president of the European Central Bank, gave the most extensive explanation, albeit still brief, of the ECB’s rationale for launching its Eu60bn covered bond purchase programme in a speech delivered this (Friday) morning. Yesterday (Thursday) the ECB had confirmed expectations that spending under the programme in August was almost entirely concentrated on the secondary market.

The tally of settled covered bond purchases bought under the European Central Bank’s purchase programme grew by Eu183m overnight to reach a reported total of Eu9.595bn this (Thursday) morning.

Moody’s will conclude its review of Kommunalkredit Austria’s ratings within the coming weeks on the basis of the banking group’s existing structure and profile without, as originally planned, taking into account comments from the European Commission on the bank’s restructuring plan.

Moody’s today (Thursday) outlined some considerations regarding the rating of Australian covered bonds should they be issued in accordance with a legislative framework put forward by the Australian Securitisation Forum.

Banesto (Banco Español de Crédito) yesterday (Wednesday) secured the tightest level for a cédulas since the market reopened in May when it priced a Eu1.25bn three and half year mortgage-backed issue at 45bp over mid-swaps. The issuer told The Cover that while other institutions may be waiting for spreads to tighten further, it was happy with its decision to launch a deal in the early days after the summer break.

Pfandbriefzentrale der schweizerischen Kantonalbanken issued Sfr484m (Eu319.4m) of paper yesterday (Wednesday) at levels bankers said harked back to the good old days.

Banesto (Banco Español de Crédito) this (Wednesday) morning launched the first single issuer cédulas since the beginning of June, a Eu1.25bn three and a half year mortgage-backed issue that will be priced at 45bp over mid-swaps, 75bp tighter than where the issuer sold a four year issue on 26 May.

The European Central Bank reported Eu216m of newly settled purchases under its Eu60bn programme this (Wednesday) morning, a day before it is due to give its second monthly update on the scheme.

Eurohypo will today (Wednesday) price a Eu1bn five year public sector Pfandbrief at 12bp over mid-swaps, the tight end of guidance, despite an order book size that left some market participants unimpressed.