Americas

Moody’s put JP Morgan Chase & Co on negative outlook yesterday (Wednesday). It is rated Aa3, but the recession is expected to create high provisions and credit costs for the next four to six months.

Bank of America NA and Bank of America Corporation were put on review for downgrade by Moody’s yesterday (Wednesday). Bank of America NA is rated Aa2 and its parent A1.

The Office of the Superintendent of Financial Institutions Canada gave measured encouragement to proponents of a legislation framework for Canadian covered bonds at a conference in Toronto yesterday (Wednesday).

The US should look to the Danish mortgage bond system for lessons on how to operate a stable and functioning market, suggested panellists on a forum hosted by Nykredit at the Euromoney Bond Investors Congress on Tuesday.

The US Covered Bonds Council met on Friday, but the development of covered bonds in the US is being held up on continued uncertainty over the Federal Deposit Insurance Corporation’s plans.

The Canadian Bankers Association (CBA) earlier this month submitted a proposal for a covered bond legislative framework to the Canadian government.

Panellists at the American Securitization Forum conference in Las Vegas said on Tuesday that the credit crisis had opened up new opportunities for covered bonds in the US, even as it had called into question the idea that they are a rates product rather than a credit product.

In this roundtable, representatives of Canada's leading banks exchanged their views on the prospects for covered bonds in the country, and on how Canada’s economy, banking sector and mortgage market are very different from those of its neighbour.

Covered bonds are expected to be eligible for government guarantees under a planned extension of the Federal Deposit Insurance Corporation’s Temporary Liquidity Guarantee Programme (TLGP) that was announced on Friday.

Fitch and Moody’s on Friday downgraded Bank of America NA, the sponsor bank of its covered bond programme, with the latter cutting the bank’s rating for the second time in just over a week.

Danske Bank launched the first government-guaranteed deal for a Danish bank this (Wednesday) morning. Bayerische Landesbank opened books on a SoFFin-backed deal, while unguaranteed senior supply has reached new areas.

Moody’s yesterday (Thursday) downgraded the issuer rating of Bank of America NA, the sponsor bank of its covered bond programme, from Aaa to Aa1 and assigned a negative outlook to the new rating. The move follows the completion of the bank’s takeover of Merrill Lynch.