Covered Bonds

In brief: Dexia has selected leads for the first benchmark offering from its Luxembourg registered arm, Dexia LdG Banque. Dexia intends to take advantage of the greater flexibility on offer under that country’s jurisdiction.

*Excludes German, French, Spanish and Nordic issuance.

Banca Popolare di Milano (BPM) took the plunge before the summer break this morning, opening books on it debut euro benchmark covered bond, the first from Italy. One syndicate manager outside the deal welcomed it for establishing Italy where it belonged in his view, although disconcertingly for fans of orthodox geography he suggested this was somewhere between France and Portugal.

Click here for the latest covered bond pipeline (opens pdf).

While Moody’s is expected to cut Bradford & Bingley’s covered bond ratings, its peers look likely to be less severe. On Friday S&P said that new external factors supported its view of the bank’s senior rating, while B&B has already taken action to satisfy Fitch’s triple-A view of its covered bonds.

Deutsche Bank may have come first in the all benchmarks ranking for the first half of 2008, but it was by no means the strongest across all markets. Here The Cover reveals the top banks in each of the biggest sectors and examines where the leading banks’ weaknesses lie.

McKee Nelson announced this week the creation of what is believed to be the first covered bond team at a US law firm. The Cover spoke to partner Kenneth Marin about the rationale for the move and its expectations for the US covered bond market.

And so it is with a heavy heart that we must bid a fond farewell to Euro 2008. Goodbye Michael “Blackberry” Ballack and thanks for the memories. Whatever are we going to write about now the football is over? Holland’s smokin’ laws… Japan’s floating bond… Hmm… Anyone for a rematch?

In the Swiss franc market Pfandbriefbank Schweizerischer Hypothekarinstitute returned to the bond market after just three weeks, with a Sfr600m dual tranche transaction.

The question is not if, but how severely Moody's will cut the ratings of Bradford & Bingley's covered bonds following the rating agency's downgrade of B&B's long term rating from A3 to Baa1 early this morning, said analysts today (Friday).

In brief: S&P has downgraded by one notch the long term ratings of seven members of the Hypo Real Estate (HRE) group, citing writedowns in its structured credit portfolio and challenging business conditions. The triple-A ratings of all of the group’s various outstanding covered bonds were affirmed.

The draft amendment of the Pfandbrief Act has been released. The proposal is in line with expectations, including mainly technical changes, with the creation of a new class of aircraft Pfandbriefe being the only radical feature.