Covered Bonds

Moody’s yesterday (Monday) downgraded Dexia Crédit Local from Aa3 to A1 and assigned a negative outlook to the rating.

In brief: The market related issues working group of the European Covered Bond Council will be meeting on Thursday of next week (29 January) to hear presentations from three potential providers of electronic trading platforms for the market and to discuss other initiatives to improve liquidity.

Crédit Agricole is discussing a possible debut covered bond with investors this (Tuesday) morning. However, other issuers are said to have potentially been deterred from proceeding with jumbos by the deterioration in the market around the weekend.

Moody’s on Friday changed the outlook on BNP Paribas’ rating from stable to negative.

Covered bonds are expected to be eligible for government guarantees under a planned extension of the Federal Deposit Insurance Corporation’s Temporary Liquidity Guarantee Programme (TLGP) that was announced on Friday.

Fitch and Moody’s on Friday downgraded Bank of America NA, the sponsor bank of its covered bond programme, with the latter cutting the bank’s rating for the second time in just over a week.

Fitch on Friday affirmed the long term issuer default ratings of Anglo Irish Bank Corporation at A- and the AAA rating of its covered bonds, while Standard & Poor’s today (Monday) confirmed that its A- rating of the bank remains on negative review.

The European government-guaranteed market was relatively quiet this (Monday) morning, with IKB Deutsche Industriebank’s SoFFin-backed senior unsecured debut the only new issue. However, even that failed to generate the excitement of the first three German deals, with the overall market weaker.

Fitch on Friday downgraded the rating of Lloyds TSB Bank from AA+ to AA-. The long term ratings of HBOS and Bank of Scotland were also cut, from AA to AA-.

Fitch on Friday changed the outlook on its AA rating of HSBC Bank from stable to negative.

Newcastle Building Society has executed its first issue off a newly established Eu2bn covered bond programme.

HM Treasury has yet to decide whether or not covered bonds will form part of a planned scheme to guarantee asset-backed securities issuance announced by the UK government today (Monday), The Cover understands.