Covered Bonds

Moody's today (Monday) warned that there will be further negative pressure on covered bond ratings this year as the challenges they faced in 2008 continue unabated.

After Norwich & Peterborough Building Society and Newcastle Building Society recently launched the first UK covered bonds to include a partial pass-through structure, Fitch suggested last Thursday that similar structures may have a role to play outside deals designed to access central bank funding. But other market participants are less certain that investors can be won over by them.

Anglo Irish Mortgage Bank yesterday (Thursday) issued the debut transaction off its Irish commercial mortgage covered securities programme. The deal is also the first for the market segment.

n/a: These banks, or their predecessors, were ranked below the top 20 in 2007.

Moody’s yesterday (Thursday) concluded a review for possible upgrade of Eurohypo’s ratings by leaving its long term debt rating unchanged, at A1.

Moody’s yesterday (Thursday) placed on review for possible downgrade the Aaa rating of Achmea Hypotheekbank’s covered bonds.

The government guaranteed bank debt market was the juncture of two waves of negative sentiment in the markets this week, as downgrades hit the sovereign market and financial institutions suffered renewed pressure.

Laurent Vernadat, who was in charge of covered bond syndication at Calyon in London, has left the French bank.

As part of a second aid package for Danish banks, the Danish government has extended guarantees to junior covered bonds in a move aimed at protecting the outstanding covered bonds of Danish mortgage institutions.

Crédit Agricole executed its inaugural jumbo covered bond yesterday (Wednesday), a Eu1.25bn seven year deal priced at 135bp over mid-swaps. The deal is only the second jumbo since 8 September and marked a rare visit, from any type of issuer, to the seven year maturity.

Standard & Poor’s yesterday (Wednesday) downgraded the ratings of Caixa Geral de Depósitos and Banco Santander Totta after cutting the Republic of Portugal’s rating from AA- to A+.

Fitch yesterday (Wednesday) assigned Anglo Irish Mortgage Bank a long term issuer default rating of A-, with a stable outlook.