Americas

DnB Nor Boligkreditt debuted in the US market with a $2bn (Eu1.43bn) five year issue on Wednesday that gave it tighter pricing than was available in euros, but the issuer told The Cover that strong US demand was the most pleasing aspect of the benchmark.

Canadian Imperial Bank of Commerce issued the first Kangaroo covered bond since March 2007 yesterday (Thursday), pricing a A$750m (Eu530m or C$748m) three year deal at 48bp over swaps, the tight end of 50bp area guidance, on the back of a book of more than A$1bn.

Italy’s UBI Banca will today (Thursday) price a Eu500m five year issue on the back of modest demand, while DnB Nor Boligkreditt yesterday sold its first dollar benchmark covered bond and Canadian Imperial Bank of Commerce priced its first covered bond in the Kangaroo market.

Skandinaviska Enskilda Banken will today (Wednesday) price a Eu1bn seven year issue at the tight end of revised guidance after meeting with strong demand for the first Swedish euro benchmark since June. Meanwhile, Italy’s UBI Banca is gauging interest for a new issue, Canadian Imperial Bank of Commerce has opened books for an Australian dollar debut, and a mandate for a debut off an innovative programme has been added to the deal pipeline.

Spain’s Unicaja will today (Tuesday) price a Eu750m five year cédulas hipotecarias issue, more than a marketed Eu500m minimum deal size, although syndicate bankers away from the leads said the deal had at times appeared to struggle. Issuance was otherwise restricted to a tap and floating rate note, although there are rumours of deals in the pipeline and CIBC has mandated for an Australian dollar debut.

EuroWeek and The Cover, in association with Barclays Capital and Goldman Sachs, sought out the views of leading issuers, investors and Congressman Scott Garrett to discuss the US dollar covered bond market’s potential with respect to domestic and foreign issuers, as well as legislative and regulatory issues facing the asset class in the US.

A resurgence of US targeted benchmark covered bond supply this year was welcomed by issuers and investors at the ECBC/Euromoney Covered Bond Congress in Zurich last week, with the buy-side airing a series of recommendations as to how the market could expand.

A Senate Banking Committee hearing on covered bonds yesterday (Wednesday) showed that the success of initiatives to establish covered bond legislation in the US appears to hinge on lawmakers’ ability - if indeed it is possible - to reconcile calls from the Federal Deposit Insurance Corporation for flexibility in its handling of covered bonds in the event of receivership with legal certainty for issuers and investors.

GCE Covered Bonds announced a mandate for a new covered bond this (Wednesday) morning, but otherwise the primary market was quiet after yesterday’s five euro benchmarks and one dollar issue.

The Senate Committee on Banking, Housing & Urban Affairs will hold a first hearing on covered bonds next Wednesday (15 September).

Treasury Secretary Tim Geithner referred to covered bonds in opening remarks at a conference on the future of housing finance in the US held yesterday (Tuesday) by the Treasury and Department of Housing and Urban Development (HUD).

A poll of delegates at a recent Moody’s investor briefing found almost half to be sceptical about covered bonds being a viable alternative to residential mortgage-backed securities in the US. However, in a discussion that followed, panellists argued that the asset class could prove complementary to RMBS.