Covered Bonds

Standard & Poor’s on Friday revised from stable to negative the outlook on four regional Italian banks, including Banca Popolare di Milano and Banca Carige, both of whom have covered bond programmes.

Skandinaviska Enskilda Banken is today (Monday) tapping the market with a five year benchmark covered bond, the first in six months for an issuer away from France and Germany.

Fitch today (Monday) affirmed DZ Bank’s covered bonds at AAA, after the bank took action to compensate for its increased exposure to the German cooperative banking sector.

Moody's is investigating whether certain provisions of the UK Banking Act may negatively affect covered bonds and structured finance transactions.

DnB Nor is setting up a new institution to issue covered bonds backed by commercial mortgages, while DnB Nor Boligkreditt will continue to focus purely on residential mortgage-backed issuance.

The main ranking in this league table now excludes credit for SFEF issuance. However, we have included in the second column the ranking for each bank including SFEF issuance.

Skandinaviska Enskilda Banken is today (Friday) testing the market for a new benchmark covered bond, The Cover understands.

Fitch is updating the residential mortgage default model criteria it uses for analysing Portuguese mortgage covered bonds and residential mortgage-backed securities, and expects to require higher overcollateralisation for covered bonds.

The Financial Services Authority’s Covered Bond Standing Group (CBSG) is setting up a UK covered bond trade association, The Cover understands.

Moody’s yesterday (Wednesday) downgraded SpareBank 1 Gruppen’s long term issuer rating from A3 to Baa1, and left the rating on negative outlook, a day after cutting three members of the SpareBank 1 Alliance by one notch.

Have this week’s jumbos for Eurohypo and Société Générale given investors what they were asking for? The message they delivered to issuers at last week’s IMN covered bond conference in London last week was clear: come to the market, because we’re ready to invest.

Eurohypo on Tuesday afternoon priced its first jumbo of the year, a Eu1.25bn five year mortgage Pfandbrief, at 100bp over mid-swaps, the tight end of 100bp-110bp over initial guidance. The issue marked the successful implementation of a three-pronged funding strategy for the Commerzbank group.