Austria

Standard & Poor’s yesterday (Tuesday) downgraded Hypo Investmentbank’s rating from A+ to A.

After a long break from issuing Pfandbriefe, Austrian bank Hypo Vorarlberg is making moves to return to what was a traditional funding source for the bank.

Austria’s Hypo Investmentbank launched its first public sector Pfandbrief issue last Thursday, a Eu120m deal, a day after Moody’s assigned a Aaa rating to its covered bond programme.

Dexia Crédit Local today (Tuesday) found its second visit to the government-guaranteed market easier than its first and is set to price its new issue this afternoon. Meanwhile Lloyds TSB found demand from unexpected areas in sterling and OeVAG wrapped up its four year euro.

Dexia Crédit Local is hoping to win over investors to its three-way guaranteed paper when it comes to market tomorrow (Tuesday), while OeVAG has today (Monday) been negotiating the differences in opinion on Austrian spreads.

Österreichische Volksbanken (OeVAG) is planning to issue a four year euro government-guaranteed deal on Monday and is set to pay a chunky premium over recent three year Austrian paper to ensure success.

IKB Deutsche Industriebank issued a Eu2bn three year government-guaranteed bond at 45bp over mid-swaps today (Thursday). The pricing took into account IKB's troubles and the anomalies of the secondary market.

The pace of government-guaranteed issuance picked up today (Wednesday), with an Austrian, a UK and possibly a German name joining in. Banks are said to be keen to complete deals ahead of the European Central Bank meeting tomorrow (Thursday).

Spanish and Dutch financial institutions are today (Tuesday) braving the government-guaranteed market after yesterday's turmoil. The two deals are coming wider than recent comparables, but are both understood to be going well.

Kommunalkredit Austria is in the market today (Friday) with a three year government guaranteed senior debt issue at a wider spread than was heard earlier this week, after Caixa Catalunya got its deal over the line yesterday (Thursday).

Erste Bank yesterday (Thursday) continued this week’s trend of pricing government guaranteed issues in line with guidance, some at tighter levels than the most recent deals from the respective jurisdictions. Meanwhile a third Spanish bank is preparing to follow in Caja Madrid's footsteps.

Erste Bank is in the market today (Thursday) with its second government-guaranteed transaction. The deal is the fifth Austrian government-backed bond, and Erste's first in the five year maturity.