Americas

The primary market for European bank issued covered bonds appears to be gently slowing with just one deal from France’s Dexia MA pricing yesterday and another from Germany’s Aareal closing books at midday. In contrast a number of transactions are in the works from Canadian and Australian banks across a range of currencies –inaugural deals from new issuers and several rumours of others.

News earlier this week that the German regulator, Bafin, had sent out a draft letter regarding the treatment of structured covered bonds, has added to concerns that certain structures may see renewed selling pressure. But for some investors this may herald an investment opportunity.

Congressman Scott Garrett, the Republican politician who has been leading a push for covered bond legislation in the US, has been selected to serve as chairman of the capital markets subcommittee in the House of Representatives, an appointment that US lawyers and market observers cited as one of several grounds for optimism that legislation could be passed next year.

John van Boxmeer will leave the treasury and balance sheet management department of TD Financial Bank Group at the end of January 2011. Meanwhile, independently of van Boxmeer’s move, a reorganisation of the department has put Craig Lowery in charge of all funding activities at TD, The Cover understands.

Barclays Capital’s head of covered bond origination in the Americas has left to join RBC Capital Markets, The Cover understands.

The US Covered Bond Council, a forum sponsored by the Securities Industry and Financial Markets Association (Sifma), has questioned the Federal Deposit Insurance Corporation’s understanding of proposed US covered bond legislation and existing law following comments made by the FDIC at a housing finance conference last week.

Fitch placed mortgage backed covered bonds issued by BA Covered Bond Issuer (BACBI) on negative review on Tuesday, after placing Bank of America NA on Rating Watch Negative on Friday.

The Federal Deposit Insurance Corporation wants to work together with Congressional proponents of a US covered bond market to establish “balanced” covered bond legislation to foster such a market, FDIC chairman Sheila Bair said at a housing finance symposium yesterday (Monday). Last week Congressman Scott Garrett told a conference in New York he was “cautiously optimistic” that US covered bond legislation could be finalised before the end of next year.

Fitch placed Bank of America NA on Rating Watch Negative on Friday, following initial interpretation of the Dodd-Frank Wall Street Reform & Consumer Protection Act and its implications for systemically important financial institutions.

Belgium’s Axa Bank Europe secured the first refinancing of its mortgage business via covered bonds today (Friday), with Axa Bank Europe SCF receiving solid demand for an inaugural, Eu750m 10 year obligations foncières issue.

SpareBank 1 Boligkreditt sold a $1.5bn (Eu1.077bn) three year benchmark in the US market yesterday (Wednesday) and the issuer told The Cover that the transaction was part of a strategic move to diversify its investor base.