Covered Bonds

Norway’s Sparebanken Vest is preparing to launch its first covered bonds, having set up Sparebanken Vest Boligkreditt.

Barclays’ analysts have taken the brave step of publishing their supply forecast for jumbo covered bonds next year, and it’s not good news: close to zero for the first two quarters of 2009, with issuance only resuming in the second half of the year. Unfortunately the forecast is only moderately more pessimistic than the emerging consensus The Cover has found.

The European bond market is bracing itself for a pick-up in guaranteed senior unsecured issuance from a wider range of jurisdictions as banks put the final touches to their new documentation and regulators release precise details of their respective guarantees.

Agencia Nacional de Vivienda, Uruguay’s national housing agency, has completed a project of law for covered bonds. The initiative forms part of a wider reform of the South American country’s housing finance system.

Moody’s yesterday (Wednesday) placed on review for possible downgrade the public sector covered bonds of Hypo Alpe Adria International (HAAI) that do not benefit from a grandfathered guarantee from the State of Carinthia.

The Association of German Pfandbrief Banks (vdp) has relaxed the minimum standards for increases to jumbo Pfandbriefe to make it easier for issuers and dealers to offer paper in the illiquid market conditions. Some bankers were sceptical that the move would provoke much supply, but one was hopeful that it might presage a broader discussion about minimum jumbo standards.

The Financial Services Authority's addition of seven programmes to its Regulated Covered Bonds Register yesterday (Tuesday) has been welcomed, but is expected to have limited impact in the short term given the more immediate concerns of the market.

While the Swedish National Debt Office has announced the fixed fees for its guarantee scheme and the bank-specific fees for guaranteed senior unsecured debt, market participants are still waiting for news on the individual fees that will be charged for guaranteeing covered bonds.