Covered Bonds

Moody’s this (Tuesday) morning cut the rating of Skandinaviska Enskilda Banken AB from Aa2 to A1 and that of its German subsidiary, SEB AG, from A1 to Baa1, and left them both on negative outlook.

The jumbo market looks set for a quiet four day week, despite syndicate officials saying that market conditions are favourable for issuance. The situation on the government-guaranteed market is hardly different, with Fortis the only borrower active today (Monday) and no other issues said to be in the immediate pipeline.

The Spanish authorities’ rescue of Caja de Ahorros de Castilla-La Mancha (CCM) is not likely to affect Fitch’s AAA ratings of multi-issuer cédulas transactions to which the savings bank contributes, said the rating agency yesterday (Thursday).

Caixa Galicia has closed books on a Eu1.25bn three year government guaranteed issue that it is due to be priced this (Friday) afternoon, rounding off a week in which Spanish issuers fared better than some market participants had been expecting after Caja de Ahorros de Castilla-La Mancha had to be rescued last weekend.

Standard & Poor’s yesterday (Thursday) put secured debt issued off ABN Amro’s Bouwfonds programme on CreditWatch developing, but said that the bank’s covered bond ratings were unchanged, after it was announced last week that both would be allocated to the ABN Amro businesses the Dutch state is acquiring.

The Swedish government yesterday (Thursday) revised its guarantee programme for bank debt to encourage banks to raise more long term funding. Unsecured bank debt can now be guaranteed in maturities out to five years, making it look even more unlikely that Swedish banks will take up the option of issuing guaranteed covered bonds, which was already available for maturities of up to five years.

Caisse Centrale du Crédit Immobilier de France (3CIF) was cut from A+ to A by Standard & Poor’s yesterday (Wednesday) because of a decline in the quality of its loan portfolio and falling profitability.

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

Nykredit on Monday introduced two-tier mortgage lending to finance commercial properties in a bid to avoid the potential costs associated with issuing junior covered bonds. The new approach involves the re-emergence of traditional mortgage bonds, issuance of which had fallen significantly after January 2008, when the Capital Requirements Directive (CRD) came into effect.

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

Standard & Poor’s yesterday (Wednesday) put six members of the Hypo Real Estate group on CreditWatch positive after the German Financial Markets Stabilisation Fund (SoFFin) took a 8.7% stake in the group as a first step to taking control of and recapitalising it. The rating agency said that an upgrade of up to three notches is possible.