Covered Bonds

In brief: Moody’s today (Friday) downgraded Bradford & Bingley’s covered bonds to Aa1 over concerns that the bank’s proposals for raising the level of protection offered in terms of both expected loss and timely payment fall short of what is necessary to retain a triple-A.

In brief: Standard & Poor’s today (Friday) assigned a preliminary triple-A rating to the first benchmark offering from Dexia’s Luxembourg registered bank, Dexia LdG Banque. The Luxembourg arm is expected to issue up to Eu1.5bn of public sector bonds, though the maturity has not yet been set.

Swedbank has closed books on its Eu1bn two year issue and priced the mortgage backed deal at 22bp over mid-swaps, the middle of guidance, bringing to a successful conclusion an exercise that had several hurdles to overcome along the way.

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Bayerische Landesbank opened books on a three public sector Pfandbrief benchmark this (Thursday) morning as Eurohypo was closing books on a Eu1bn five year mortgage backed jumbo. However, the two projects were sufficiently different for the two to progress smoothly.

Swedbank opened books on a two year mortgage backed benchmark this (Thursday) morning some 5bp back from where some accounts were sounded out earlier this week, suggesting that the issuer was suffering from launching a deal in almost direct competition with Skandinaviska Enskilda Banken, which priced its Eu1bn three year mortgage backed deal yesterday (Wednesday) afternoon.

In brief: Crédit Agricole has mandated the first issue off its new covered bond programme to Barclays Capital, Calyon and UniCredit. The deal is expected in mid-September after a European roadshow.

The Reserve Bank of New Zealand has told The Cover that it is comfortable with the country’s banks using covered bonds and is preparing a policy to govern the instrument. The statement follows reports that Westpac New Zealand is working on a covered bond programme.

Skandinaviska Enskilda Banken closed books on the first post-holiday benchmark this (Wednesday) morning, but its execution gave little cause for celebration. The potential for competing issuers’ plans to clash in what is expected to be a busy period has also been made clear, with negative implications for spreads.

*This week, all league tables will rank lead managers according to performance from 16 August 2007 to 16 August 2008 and compare them with rankings for the prior year.