Austria

The number of active covered bond borrowers looks set to hit a new record after Moody’s assigned its top rating to the hard bullet mortgage covered bond programme of Austria’s Raiffeisenlandesbank Oberoesterreich (RFLBOB).

CA Immobilien Anlagen, the Austrian real estate business, was able to increase the size of a new issue to €140m on Tuesday, with strong support from domestic investors.

Shares in Erste Bank and Euskaltel closed nearly 4% lower on Wednesday after two block trades were executed in their shares on Tuesday evening.

Citigroup has hired an equity capital markets banker from Deutsche Bank to help its business in the German-speaking region.

German and Austrian covered bond issuers are expected to benefit if the Austrian government’s most recent offer for partial repayment of Heta Asset Resolution’s senior and subordinated debt is accepted by its creditors. Despite the more positive outlook, the loss of trust may take years to repair and for the time being Austrian covered bonds are unloved.

Erste Bank, the Austrian lender that failed to pay a coupon on legacy tier one debt just 18 months ago, this week mandated leads for an inaugural additional tier one transaction that could be one of the juiciest trades ever to hit the market.

Erste Group Bank has mandated leads for its inaugural additional tier one transaction, which will be its first issuance of capital notes since it failed to pay the coupon on legacy tier one debt at the end of 2014.

Guarantor: Republic of Austria

The Asian Development Bank and Oesterreichische Kontrollbank hit screens with dollar deals on Monday, with ADB adding more supply to a burst of dual tranche trades that included deals last week by the World Bank and the Japan Bank for International Cooperation.

KA Finanz, the wind down entity formally known as Kommunalkredit Austria, has signalled its intention to issue covered bonds.

Sappi Papier, the Austrian-South African paper manufacturer, sold €350m of secured notes at 4% to refinance its 2021 dollar bond, in a European high yield market that has brought forward its post-Easter pipeline of deals.

A source on the Austrian side of negotiations concerning Heta, the State of Carinthia and the Ad Hoc Group of creditors has revealed the depth of feeling regarding a potential payout to Heta’s creditors, saying that such a payment would be “political suicide” for any politicians involved in the deal.