Covered Bonds

Moody’s yesterday (Monday) placed on review for possible downgrade the Baa2 rated covered bonds of Mortgage & Land Bank of Latvia.

Moody’s yesterday (Monday) upgraded Bradford & Bingley’s senior unsecured and deposit ratings from Baa3 to A2 as a result of an extension of the government guarantee that covers such debt. However, its subordinated debt was cut because the institution’s buy-to-let mortgage book is deteriorating more than expected.

Buoyed by the support of investors who had been absent from the covered bond market, Banco Popular Español yesterday (Monday) afternoon priced the first jumbo since Thursday’s announcement by the European Central Bank of details of its covered bond purchase plan. And a French issuer is said to be sounding the market today (Tuesday) for a possible new issue.

Banco Popular Español has the jumbo market to itself today (Monday). The Spanish issuer is the first institution to launch a new issue after Thursday’s announcement by the European Central Bank of details of its covered bond purchase plan, with one syndicate banker saying he was surprised there was not more primary market activity in covered bonds.

Data includes jumbo issues in euros and $1bn minimum issues in dollars; excludes retained deals under Dealogic criteria.

Data includes jumbo issues in euros and $1bn minimum issues in dollars; excludes retained deals under Dealogic criteria.

Contractual mechanisms included in covered bond programmes to mitigate certain risks can have additional, unintended consequences that affect how Fitch scores elements of its Discontinuity Factor (D-Factor) analysis of the covered bonds, said the rating agency yesterday (Thursday).

European Central Bank president Jean-Claude Trichet kept the covered bond party rocking yesterday (Thursday) afternoon when he hit all the right notes in his announcement of details of the ECB’s Eu60bn purchase programme, which he said will begin next month. And the likely first deal following yesterday’s news is already being soft-sounded.

Moody’s yesterday downgraded Anglo Irish Bank and placed the ratings of Allied Irish Banks and Bank of Ireland on review for possible downgrade.

In brief: UniCredit will kick off a non-deal European roadshow on Monday to market its obbligazioni bancarie garantite programme to institutional investors.