Covered Bonds

A week on from the news that BNP Paribas was planning the first jumbo for four months, no follow-up transaction has emerged. But although no issuer has yet been prepared to pay the price to enter the market, investors, including accounts new to covered bonds, are said to be ready for a new deal.

Moody’s yesterday (Tuesday) changed the outlook of the Baa1 rating of Commerzbank’s Polish covered bond-issuing subsidiary, BRE Bank Hipoteczny, from stable to negative.

Shareholders of ATE Bank, Agricultural Bank of Greece, yesterday (Monday) authorised the bank’s board of directors to set up a covered bond programme worth up to Eu5bn.

CIF Euromortgage is increasing its Eu1.03bn 4.5% December 2013 obligations foncières this (Tuesday) afternoon by Eu200m-Eu300m.

HRE has been granted an extension of its framework guarantee from the German financial markets stabilisation fund, SoFFin, the bank announced yesterday (Monday).

HSH Nordbank wrapped up its debut SoFFin-backed bond shortly before midday London time today (Tuesday).

Moody’s yesterday (Monday) put the triple-A ratings of three series of multi-issuer cédulas on review for downgrade as a result of their exposure to Caja de Ahorros de Castilla-La Mancha (CCM) and the deterioration of the Spanish mortgage market.

A company called IF Covered Bonds LLP was incorporated in the UK last Friday. The company is thought to have been established for a new covered bond programme for the Intelligent Finance division of Bank of Scotland.

HSH Nordbank today (Monday) opened books on a three year SoFFin-guaranteed benchmark deal at 0900 London time with guidance of 30bp over mid-swaps, which is where Commerzbank’s inaugural government-backed transaction was priced on Friday.

Fitch on Friday affirmed the ratings of two of Commerzbank’s covered bond-issuing subsidiaries, on stable outlook, but although Standard & Poor’s confirmed their ratings, it left them on negative outlook.

Moody’s on Friday downgraded all Latvian mortgage bonds issued by Riga-based Mortgage & Land Bank of Latvia (MLBL) from A1 to A2.

The UK government is expected to announce details of its planned guarantee scheme for residential mortgage backed securities in the next fortnight. The scheme, which could also apply to covered bonds, is targeted at boosting mortgage lending.