Covered Bonds

In brief: The Financial Services Authority has added the first seven banks to its Regulated Covered Bonds Register, the UK regulator announced today (Tuesday). However, one bank has temporarily suspended its application.

Henning Rasche is leaving Eurohypo, where he was a member of the board of managing directors. He will, however, remain president of the Association of German Pfandbrief Banks (vdp).

Germany’s once staid banking system reinvented itself during the boom years, but the credit crisis has revealed some unpleasant truths. Chris Dammers asks how the sector will make its way out of the current mess. From EuroWeek’s Germany in the Capital Markets supplement.

Although the government guaranteed bank bond sector is maturing in the UK, the impact of broader issuance on the rest of the fixed income market has yet to fully play out, with the sovereign, supranational and agency sector throwing up new pricing surprises and some countries just beginning to gear up for issuance. Another shocking level appeared on screens only this (Monday) morning.

Société Générale increased Caisse de Refinancement de l’Habitat’s 4% April 2018 issue by Eu150m this (Friday) morning in a rare glimpse of real money-driven supply in the covered bond market. JP Morgan also privately placed two deals for Bancaja earlier this week.

Moody’s yesterday (Thursday) placed on review for downgrade the Aaa rating of Kommunalkredit Austria’s public sector covered bonds, three days after the Austrian government nationalised the bank.

In brief: Pfandbriefzentrale Schweizerischer Hypothekarinstitute raised Sfr310m through a dual tranche deal on Tuesday.

The mighty Pfandbrief has finally fallen victim to the problems suffered by other asset classes in the international capital markets. With volatile spreads, a lack of liquidity and worries over the futures of some issuers, the situation looks bleak. Nonetheless, Brendan Daly finds that this has not dented the confidence and optimism of market participants. From EuroWeek’s Germany in the Capital Markets supplement.