Covered Bonds

Swedish issuers have told The Cover that it is unlikely they will be making use of the government guarantees available to them for covered bonds. While the costs of such issuance may be interesting relative to guaranteed senior unsecured issuance, other considerations work against it.

Covered bond analysts have not pulled their punches when publishing supply forecasts for the coming year, with the most optimistic being Eu65bn and the most pessimistic being lower than in 1995 when the jumbo was created.

In the midst of the global financial crisis, officials at the National Bank of Azerbaijan are making time to review a draft covered bond law for the South Caucasian country, in a sign of their commitment to a project that is aimed at stimulating its mortgage market.

Bayerische Landesbank has set up a Eu15bn SoFFin-guaranteed debt issuance programme. The Landesbank is expected to be one of the first to issue guaranteed bank debt out of Germany in the new year.

In brief: Banca Carige has executed a Eu500m covered bond off a Eu5bn programme that was signed last Thursday (4 December), which is believed to be its first deal.

The European Covered Bond Council today (Friday) welcomed the European Covered Bond Dealers Association formed by the Securities Industry & Financial Markets Association last month.

The Finnish government will apply the same methodology as Sweden to determine the individual fees banks will have to pay to make use of the guarantee scheme for covered bonds.

Rating action: Moody’s yesterday (Thursday) placed on review for possible downgrade the long term debt rating of Austria’s Erste Group Bank (Aa3).