Barclays Capital, BNP Paribas, DZ Bank, HSBC and Landesbank Baden-Württemberg are understood to have the mandate for the planned AyT Cédulas Cajas issue, a Eu1bn-Eu1.5bn five year deal that is expected next week.
A syndicate official away from the planned multi-cédulas said that he was cautious about the deal’s chances given the resistance that another Spanish issuer is said to have been facing.
“There’s other stuff in the market that’s being tried that isn’t working very well,” he said.
Caixa Catalunya is said to have again explored the possibility of tapping the market but gained little traction.
“Caixa Catalunya has been trying to come to the market for several months,” said an investor. “The name is very, very difficult.”
One banker said that the “noise” surrounding a possible deal for the savings bank was deterring other Spanish names from approaching the market. And bankers said that some of the lead managers that had previously had the mandate for a new Caixa Catalunya issue no longer had the mandate and were not confident that they could satisfy the issuer’s targets.
However, a spokesperson for Caixa Catalunya said that although it was following the market, it is not trying to launch a new issue.
The savings bank’s cédulas hipotecarias were one of three covered bond programmes to be downgraded by Fitch last week, when the rating agency revised its liquidity risk criteria. Caixa Catalunya’s cédulas hipotecarias were cut from AA+ to AA. However, their Aaa rating was affirmed by Moody’s on 1 July.
BNP Paribas is said to be exploring a possible four year deal off its residential mortgage-backed programme. One syndicate official said that he had heard possible guidance of the mid-swaps plus 60bp area for such a deal.
An investor said that the issuer has been trying to come inside 60bp over mid-swaps, but he said that was tight and he was not sure a new issue would succeed at that spread. But another said that the level looked appropriate given where some of the issuer’s outstanding bonds, both structured and obligations foncières, were trading, even though it did not offer much of a premium.
“BNP Paribas isn’t an issuer that needs to offer a big premium,” he added.
The bank last issued off the Home Loan programme in mid-May, when it sold a Eu1.25bn three year benchmark at 85bp over mid-swaps.
Caixa Económica Montepio Geral is still in the pipeline for its debut, a mortgage-backed issue mandated to Citi, DZ, Fortis and Royal Bank of Scotland.
In a research note published yesterday (Tuesday), covered bond analysts at DZ Bank said that a Eu1bn three year mortgage-backed issue for Banco BPI and a Eu1bn five year public sector-backed deal for Caixa Geral de Depósitos launched last week had tightened 10bp-12bp in the secondary market from re-offer levels of 97bp and 85bp over, respectively. They also wrote that the Portuguese sector has been well supported by the ECB programme.
“Even in the run-up, the announcement led to a narrowing of spreads, also with Portuguese covered bonds,” they said. “In particular, in view of the so far comparatively small size of the Portuguese covered bond market, we anticipate further positive stimuli.”
If allocation of the Eu60bn is based on capital contributions to the ECB, the Banco de Portugal’s share of the programme is Eu1.4bn, equivalent to about 10.6% of the Portuguese market, according to DZ’s analysts.
Meanwhile, purchases reported under the ECB’s programme have reached Eu235m. Today’s figure is a Eu75m increase on yesterday’s.