Covered Bonds

Banesto is set to price a Eu1bn four year cédulas hipotecarias this (Tuesday) afternoon, with books due to close at around 1400 CET. Meanwhile, other issuers are exploring just what the market is willing and able to accept from Spain.

Moody’s yesterday (Monday) downgraded Aktia Real Estate Mortgage Bank’s covered bonds from Aaa to Aa1 because of a deterioration in the credit strength of the issuer.

Fitch on Friday affirmed at AAA the covered bonds of Chelsea Building Society, Principality Building Society, Skipton Building Society and Yorkshire Building Society, but placed the AAA rating of Newcastle Building Society’s covered bonds on negative review.

Banesto is the only issuer to have publicly mandated a covered bond expected next week, but a host of other banks from across the euro-zone are lining up jumbos as the post-ECB surge in issuance shows no signs of slowing down.

Banques Populaires on Tuesday visited the jumbo market for the third time, raising Eu1bn via a five year mortgage-backed benchmark. The issuer told The Cover that the deal demonstrates that it has access to investors on its own, and not only via Société de Financement de l’Economie Française (SFEF), the entity responsible for issuing debt on behalf of French banks.

Deutsche Bank will be holding a roadshow next week ahead of its first Pfandbrief issue.

Fitch yesterday (Wednesday) revised the outlook on NIBC Bank from stable to negative, while affirming the Dutch bank’s long term issuer rating.

Moody’s yesterday (Wednesday) downgraded the covered bonds of OTP Mortgage Bank by three notches after on Tuesday downgrading the issuer’s rating from Aa3 to Baa1.

Moody’s yesterday (Wednesday) placed on review for possible downgrade the Aaa ratings of seven cédulas hipotecarias programmes, four cédulas territoriales programmes and 57 series of multi-cédulas.

Véronique Hugues, global head of long term funding at Dexia, told The Cover that the group was delighted to be back in the covered bond market, after Dexia Municipal Agency on Monday priced its first jumbo since being rescued in September.