Covered Bonds

National Bank of Greece has completed its covered bond debut, launching two series of Eu1bn each off a Eu10bn programme. The bonds are thought to have been retained for possible use as collateral with the European Central Bank.

The Association of German Pfandbrief Banks has put forward new proposals to change the Pfandbrief Act on top of those included in the draft amendment that the ministry of finance has approved. Elsewhere, more dramatic changes to the business models of some issuers have also been suggested.

Hypo Real Estate completed the merger of HRE Bank International AG and HRE Bank AG yesterday (Thursday). Fitch reacted by saying that a multi-notch downgrade of HRE Bank’s Pfandbriefe is possible unless the bank addresses increased risks in the merged cover pools.

Achmea Hypotheekbank and NIBC have taken sufficient action to avoid having their covered bonds placed on CreditWatch negative by Standard & Poor’s, after the rating agency revised its stance on derivative counterparties.

Rating action: Moody’s yesterday (Thursday) downgraded Newcastle Building Society from A2 to A3, after downgrading Principality Building Society similarly on Monday. The two institutions have both been working on covered bond programmes.

Finland will include covered bonds within its planned guarantee scheme, according to a ministry of finance official. However, the impact of the guarantees for covered bonds is likely to be limited.

Fitch Ratings on Tuesday said that it is updating its criteria for rating multi-issuer cédulas hipotecarias transactions and will release its new version in the first quarter of next year.

Banco Guipuzcoano is issuing a Eu300m three year fixed rate cédulas hipotecarias, which is believed to be its first stand-alone covered bond.

Rating action: The Swedish Housing Finance Corp, SBAB, was yesterday (Wednesday) downgraded by Standard & Poor’s from AA- to A+. The AAA ratings of the covered bonds of its subsidiary, the Swedish Covered Bond Corp, were not affected.

Skipton Building Society has launched the first covered bond from its Eu5bn programme, a £750m deal.

Rating action: Moody’s yesterday (Tuesday) put HSH Nordbank’s Schiffspfandbriefe on review for downgrade as a result of the downgrade of the bank’s senior rating from Aa2 to Aa3 last week.

Pfandbriefzentrale der schweizerischen Kantonalbanken issued a Sfr450m dual tranche transaction this (Wednesday) morning. The first tranche was a Sfr235m three year bond at 4bp over mid-swaps, the second a Sfr215 seven year priced at 9bp over.