Covered Bonds

*This league table shows rankings for full-year 2008. We will, however, be double-checking the relevant data before publishing final standings. We will do so shortly.

Moody’s yesterday (Thursday) downgraded the issuer rating of Bank of America NA, the sponsor bank of its covered bond programme, from Aaa to Aa1 and assigned a negative outlook to the new rating. The move follows the completion of the bank’s takeover of Merrill Lynch.

Commerzbank today (Friday) morning priced the largest government-backed bank deal, a Eu5bn three year issue that also opened SoFFin-guaranteed issuance.

BNP Paribas wrapped up the first jumbo covered bond in four months yesterday (Thursday) afternoon, a Eu1.5bn five year at 110bp over mid-swaps. The deal affirmed the relevance of covered bonds in the post-crisis capital markets and bankers are hopeful that it will provide a cornerstone on which to build the asset class’s recovery.

Fitch yesterday (Thursday) placed Deutsche Pfandbriefbank AG’s public sector Pfandbriefe, rated AAA, on rating watch negative in light of the planned merger of Depfa in Germany into HRE Bank AG, and the rating watch negative on the latter’s public sector Pfandbriefe, which are also AAA rated.

Pfandbriefbank Schweizerischer Hypothekarinstitute is tapping two bonds via Credit Suisse this (Friday) afternoon. The first will be its August 2012 at 15bp over mid-swaps and the second its October 2022 at 25bp over.

Commerzbank today (Thursday) opened the long-awaited SoFFin-guaranteed senior unsecured bank market, paving the way for other German lenders to tap the market with this new asset class.

Outgoing US Treasury secretary Henry Paulson yesterday (Wednesday) said that covered bonds could contribute to maintaining a private sector secondary mortgage market in the US. However, he added that the credit crisis will have to be resolved before a US covered bond market is likely to be established.

BNP Paribas is today (Thursday) in the market with the first new jumbo covered bond since 8 September 2008, belying fears that the primary market could remain shut for as long as the first half of the year. While no flood of issuance is expected in the wake of the French bank’s deal, there is already talk of further supply next week.

The euro market burst into life today (Wednesday), with the sovereign, supranational and agency sector and unguaranteed senior bank issuance hitting the screens. The first German government guaranteed deal now looks set to emerge tomorrow, but the covered bond market remains shut.

*This league table shows rankings for full-year 2008. We will, however, be double-checking the relevant data before publishing final standings. We will do so shortly.

Data includes jumbo issues in euros and $1bn minimum issues in dollars; excludes retained deals under Dealogic criteria.