Austria

Hypo Tirol has named leads for a new benchmark euro-denominated mortgage covered bond. Austrian mortgage-backed bond issuance appears to gathering momentum after a long Heta hangover. However, rival bankers say that lingering concerns about the level of exposure the mortgage banks have to Heta may hamper the deal.

A pair of SSAs hit screens with euro benchmark mandates on Monday — and bankers are confident that market conditions will stay bright to support even more expected supply.

UniCredit Bank Austria (Baca) returned to the covered bond market on Tuesday to issue the first Austrian Pfandbrief since the country’s Financial Markets Authority (FMA) announced a debt moratorium on bonds issued by Heta Asset Resolution AG (HAR).

Middle market investment bank Baird has hired a head of investment banking for Germany, Austria and Switzerland, a new role at the firm.

Activity in the covered bond primary market continued at a brisk pace on Wednesday as RBC, DG Hyp, Caffil and Erste Bank priced transactions, taking the deal count this week to 10. Despite mixed receptions, issuers have been able to raise over €7bn, with over €3bn issued on Wednesday, and at levels that look attractive compared to senior unsecured financials.

Austrian covered bonds have been largely unaffected by the reinstatement of the State of Carinthia’s guarantee and the ensuing downgrade by Moody’s of the state to B3, according to analysts at LBBW.

The Austrian restructuring law that wiped out subordinated debt guaranteed by the state of Carinthia was overturned this week by the Austrian constitutional court (VfGH). However, it is not expected to change the positions of subordinated and senior creditors much. Covered bonds should remain secure, said research analysts at LBBW and Erste Bank.

Rating: Unrated

Austrian insurer Uniqa Group proved that subordinated debt is back on the table on Monday, paving the way for Ibercaja to print a tier two.

Austrian insurer Uniqa Group has launched a €500m subordinated note, its first appearance in the market since 2013.

The Austrian subsidiary of Steinhoff International, the South African furniture retailer, has issued an inaugural Schuldschein for €650m, the second largest of the year.

The assets of distressed Austrian bank Oevag will be divided between a bad bank and Volksbank Wien-Baden. Unlike the case of Kommunalkredit however, all of the bank’s outstanding covered bonds will be transferred to Volksbank. Analysts say this indicates the Austrian regulator is returning to a more traditional and investor friendly method of bank splitting.