Covered Bonds

Many government interventions since the subprime turmoil erupted last summer have been ill-advised and/or unwelcome. The US Treasury’s decision to get involved in the country’s stalled covered bond market is neither.

Fitch and Standard & Poor’s have released reports on their triple-A ratings of Barclays Bank’s covered bond programme, offering details on its size and how much the structure and collateral has in common with other UK programmes.

The market may have been quiet of late, but we have taken advantage of the lull in activity to add some new features to The Cover and these are now live. Given the positive feedback we have received since going live last September, we have not made any dramatic changes to the site, but hopefully the refinements should make The Cover even more useful, interesting and easier to navigate.

The onset of the crisis last year has caused dramatic changes to the make-up of issuers in the jumbo covered bond market, according to an analysis by The Cover of how supply in the first half of 2008 compares to that in the record year of 2006. The results also have implications for what supply can be expected in future years.

In brief: Barclays Bank has issued what are understood to be its first covered bonds, two £1bn (Eu1.26bn) floating rate notes. The bank is the latest UK issuers to have placed large sterling floaters since the Bank of England’s Special Liquidity Scheme (SLS) was established in April.

In brief: Standard & Poor’s yesterday (Monday) affirmed and withdrew its AAA rating of Berlin-Hannoversche Hypothekenbank’s public sector Pfandbriefe. The issuer requested the action because so that it is now rated by the same agencies as its majority owner, Landesbank Berlin.

Deutsche Bank has retained its number one position in The Cover’s all benchmarks ranking at the end of the first half of the year, but whereas it had a comfortable lead at the end of the first quarter, Barclays Capital is now breathing down its neck.

In brief: US law firm McKee Nelson is gearing up for the anticipated growth of issuance in the country with the creation of what it says is the first dedicated covered bond team in the States.