Covered Bonds

In brief: Moody’s today (Friday) assigned a provisional Aaa rating to a planned first issue off a structured covered bond programme of Landesbank Berlin, Daheim 1, outside Germany’s Pfandbrief framework.

Moody’s yesterday (Wednesday) changed the outlook on Deutsche Schiffsbank’s A2 rating from stable to negative.

European Central Bank president Jean-Claude Trichet sprang no surprises when announcing details of the ECB’s Eu60bn covered bond purchase programme this (Thursday) afternoon. However, the breadth of the eligibility criteria should mean that the market remains well supported and market participants are already said to be discussing the possibility of adding further new issues to the wave of supply that followed the announcement of the plan on 7 May.

Moody’s yesterday (Wednesday) downgraded from A1 to A3 the covered bonds issued by UniCredit’s Hungarian mortgage bank, UniCredit Jelzalogbank, and placed them on review for further downgrade.

With details of the European Central Bank’s plan to purchase Eu60bn of covered bonds due this (Thursday) afternoon, covered bond specialists yesterday (Wednesday) looked beyond the positive impact of the central bank’s actions to explore how much damage could be done to the market by changes to rating agency methodologies.

Aareal Bank today (Thursday) priced a Eu500m three year mortgage-backed Pfandbrief, taking advantage of positive market conditions to launch a deal that corresponds well with its underlying cover pool.

Aktia Real Estate Mortgage Bank successfully priced a Eu600m, Aa1 covered bond this (Wednesday) morning, which bankers said highlighted the flexibility on offer in the market.

Kookmin Bank sold a $300m (Eu211m) senior unsecured deal yesterday (Tuesday) and it quickly tightened to inside the lender’s recent $1bn covered bond issue, leading some bankers to question the future for Asian covered bonds.

Deutsche Bank yesterday (Tuesday) priced its inaugural Pfandbrief, a Eu1bn seven year mortgage-backed benchmark, at 55bp over mid-swaps off the back of a book that was more than five times covered.

BNP Paribas priced its first public sector obligations foncières issue, a Eu1bn five year transaction, at the tight end of guidance yesterday (Tuesday) afternoon, turning its deal around quickly after laying the foundations for the debut a few months ago.

BNP Paribas will this (Tuesday) afternoon price its first public sector obligations foncières issue, a Eu1bn five year deal, at the tight end of guidance. And another French obligations foncières issuer is said to be looking at this part of the curve.

Aktia Real Estate Mortgage Bank is today (Tuesday) sounding out investors for a five year non-jumbo.