Covered Bonds

Standard & Poor’s yesterday (Wednesday) downgraded the rating of UniCredit SpA from A+ to A, and revised the outlook from negative to stable. The ratings of several related entities were also cut by one notch.

Greece’s covered bond legislation was recently amended to give banks a third issuance structure option in addition to two that have already been used.

Fitch will be speaking to Italian covered bond and residential mortgage backed securities issuers to find out how payment holidays for mortgage borrowers envisaged under the country’s “Tremonti” decree will affect their programmes.

Aareal’s debut SoFFin-backed issue has been the highlight of government-guaranteed supply this week, while BNP Paribas is today (Wednesday) adding momentum to a reopening of the unguaranteed senior bank market.

Moody’s yesterday (Tuesday) downgraded three Norwegian savings banks that are members of the SpareBank 1 Alliance from Aa3 to A1.

Société Générale today (Wednesday) priced a Eu1.25bn 10 year public sector obligations foncières issue after meeting with healthy demand for a deal that visited a part of the curve that has not been tapped by a jumbo since May last year.

Michael Krimminger, special advisor for policy, office of the chairman of the Federal Deposit Insurance Corp, told delegates at IMN's Global Covered Bonds conference in London on Friday that the FDIC hopes that its proposed addition of a collateralised element to the Temporary Liquidity Guarantee Programme could act as a stepping stone to the issuance of covered bonds in the US. But covered bond bankers are skeptical, and think that the term covered bond should be used with caution in the context of the FDIC’s proposal.

Breaking news: Société Générale has opened books on a public sector obligations foncières issue, a 10 year deal that is the first benchmark issue in that part of the curve since ING tapped the maturity in May 2008.

Austria’s Hypo Investmentbank launched its first public sector Pfandbrief issue last Thursday, a Eu120m deal, a day after Moody’s assigned a Aaa rating to its covered bond programme.

Eurohypo is expected to price a jumbo five year mortgage Pfandbrief later today (Tuesday), after having had to negotiate a tricky price discovery process.

The Financial Services Authority gave an insight into its position on covered bonds at IMN’s Global Covered Bonds conference in London last Thursday, describing how its policy has evolved in response to the financial crisis.

Fitch on Friday afternoon downgraded the cédulas hipotecarias (CHs) of Caixa Catalunya and Caixanova from AAA to AA+, after cutting their issuer default ratings earlier that day. And a further cut looks in store for Caixa Catalunya if Fitch’s revised liquidity risk assumptions are implemented in their proposed form.