Austria

Moody’s downgraded Raiffeisenlandesbank Niederoesterreich-Wien from Aa3 to A1 yesterday (Wednesday) after carrying out stress tests on the bank’s earnings, assets and capital.

New issues for GCE Covered Bonds and UniCredit Bank Austria and a large Caja Madrid tap took this week’s supply of Eu500m-plus deals to a solid Eu6.7bn, with GCE said to have benefitted from a recent paucity of new three year issuance from so-called core jurisdictions.

A new burst of issuance hit the covered bond market this (Thursday) morning after a breather yesterday, with GCE Covered Bonds and UniCredit Bank Austria launching new deals and Caja Madrid offering an increase of a 2014 issue.

Banesto sized a five year cédulas hipotecarias at Eu600m yesterday (Thursday), taking Eu500m-plus covered bond issuance over the past five working days to Eu6.9bn. The Spanish issuer told The Cover that it was happy to have been able to issue successfully given how tricky the market has been.

Banesto showed the breadth of the covered bond market’s post-holiday reopening today (Thursday) with a Eu500m minimum five year cédulas hipotecarias. Meanwhile, Berlin Hyp priced a Eu500m issue in the face of low yields and spreads, while Bawag PSK finally emerged after announcing plans for a new issue back in May.

Covered bond supply eased today (Wednesday) after some Eu5.3bn of supply in the past three working days, with no new deals officially live and only DnB Nor, Erste and CRH wrapping up issuance yesterday afternoon.

DnB Nor Boligkreditt is pricing a Eu1.5bn seven year covered bond today (Tuesday) after ING Bank reopened the jumbo market yesterday, while further jumbo, sub-jumbo and roadshow projects are in motion.

Moody’s downgraded unguaranteed public sector-backed covered bonds issued by Austria’s Hypo Alpe-Adria-Bank from Aa1 to Aa2 yesterday (Tuesday) after cutting the issuer rating earlier in the day. The rating agency also cut Vorarlberger Landes- und Hypothekenbank’s issuer rating.

Moody’s cut public sector-backed covered bonds issued by Kommunalkredit Austria from Aaa to Aa1 today (Friday) and placed them on review for further possible downgrade while it assesses a proposal from the issuer to increase “committed” overcollateralisation levels.

Issuers pricing transactions yesterday (Tuesday) adopted flexible approaches to timing and execution, and representatives of CIF Euromortgage and Eurohypo told The Cover that they were happy with the end results in light of market conditions.

The hectic pace of issuance in the covered bond market was maintained today (Tuesday), with three new deals following four yesterday, but issuers had to make do with smaller sizes and wider spreads.

The covered bond market had one of its busiest ever sessions this (Monday) morning, with four institutions making the most of an issuance window despite overall sentiment remaining fragile.