Covered Bonds
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Bank of America is considering whether to make changes to its covered bond programme to support its rating, after Moody’s downgraded the covered bonds from Aaa to Aa1.
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Moody’s does not believe that the UK Banking Act 2009 adversely affects the ratings of covered bonds.
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Further new issuance is on the cards for this week, despite the beginning of the European summer holiday season starting to have an impact on the pace of supply. Meanwhile, the European Central Bank has reported a further Eu43m of purchases under its programme and president Jean-Claude Trichet gave the asset class another ringing endorsement.
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Standard & Poor’s placed Banco Popular Español’s cédulas hipotecarias on negative review on Friday because of “significant” cashflow gaps.
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Jerry Marlatt, who sits on the US Covered Bonds Council steering committee, has left Clifford Chance and joined Morrison & Foerster.
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Caixa Geral de Depósitos yesterday (Thursday) priced its debut obrigações sobre o sector público, a Eu1bn five year benchmark that achieved strong pricing inside levels initially communicated to investors. Meanwhile Crédit Agricole sized a five year issue at Eu1.25bn yesterday afternoon.
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The first covered bond buying under the European Central Bank’s Eu60bn purchase programme was reported this morning, but the modest Eu23m figure offered few clues as to the longer term implementation of the scheme.
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Standard & Poor’s this week withdrew its ratings of the public sector Pfandbriefe issued by Deutsche Hypothekenbank AG Hannover Berlin. The rating agency’s proposed changes to its covered bond rating methodology and their possible consequences played a role in the issuer’s decision to request the withdrawal, a spokesperson at Deutsche Hypo told The Cover.
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Deutsche Kreditbank on Tuesday priced its inaugural mortgage-backed Pfandbrief, a Eu500m five year deal that was nearly four times oversubscribed. However, the issuer told The Cover it has no plans to move into jumbos.
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Anecdotal evidence from syndicate officials suggests that central banks have already started buying covered bonds in the primary market as part of the European Central Bank’s Eu60bn purchase programme.
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Crédit Agricole put an end to weeks of speculation that it was preparing a new issue when it launched a five year covered bond this (Thursday) morning, and appears to have been rewarded for its patience with a tight level.