Covered Bonds

Demand for Banques Populaires’ new benchmark yesterday (Tuesday) enabled the deal to be priced at the tight end of guidance, yet left room for the bond to perform today (Wednesday).

Moody’s yesterday (Tuesday) downgraded the local currency deposit and Bank Financial Strength rating of one Hungarian covered bond issuer, and revised the outlook on another’s.

Moody’s yesterday (Tuesday) put on review for downgrade the senior ratings of 34 Spanish banks because it expects their asset quality to continue to deteriorate, resulting in significantly higher credit losses than were previously incorporated in the ratings, straining capitalisation. The move threatens the ratings of some cédulas hipotecarias.

Banques Populaires this (Tuesday) morning opened books on a five year benchmark, taking the number of new jumbos to have been launched since the beginning of last week to nine, more than the eight of the first four months of the year.

Coming to the jumbo covered bond market for the second time in three months, Eurohypo yesterday (Monday) priced this year’s largest benchmark, and the second with a seven year maturity.

Dexia Municipal Agency yesterday (Monday) priced a Eu1.5bn 12 year obligations foncières issue at the tight end of guidance, marking a successful return to the benchmark covered bond market after the group’s rescue last September.

ING sized the first 10 year covered bond since the market burst back into life last week at Eu1.25bn this (Tuesday) morning. The deal is also the first new benchmark under the Netherlands’ covered bond legislation.

The European Covered Bond Dealers Association released an investor survey today (Tuesday) that, despite having been overtaken by events, highlighted some of the major concerns among investors, with the lack of the asset class’s liquidity being identified as the market’s number one challenge.

Eurohypo is today (Monday) pulling off a “blow-out” deal, according to a syndicate official away from the leads.

Dexia Municipal Agency has opened books on a 12 year obligations foncières issue, its first jumbo covered bond since it had to be rescued by the Belgian, French and Luxembourg governments in September.