Currencies

Banco Popolare Societa Cooperativia launched a Eu700m three year obbligazioni bancarie garantite yesterday (Monday), following Intesa Sanpaolo’s successful reopening of the Italian covered bond market last week. Although the deal had all the hallmarks of success, there is an increasing concern that investors now have so much high yield choice from top-tier names that second tier institutions, like Popolare, risk being crowded out.

Leads could not afford to take any risks with the pricing of Intesa Sanpaolo’s Eu1.5bn 10-year last week and therefore opted, for what some believed, was an overly generous price. But with an eye on the long line of local issuers that plan to follow it, leads and the issuer had to price the deal responsibly –for the benefit of the Italian market as a whole.

After a busy close to last week, covered bond activity has followed through this week with Abbey, Dexia MA and Westpac announcing deals while active bookbuilding commenced on Abbey, Banco Populare and Bayern LB.

Bayerische Landesbank has mandated BayernLB, Credit Agricole, DZ, HSBC and SG for a July 2016 public sector jumbo Pfandbrief.

Spain’s Bankinter has priced a Eu500m, no grow, two-year cédulas hipotecárias at 310bp over mid-swaps which, though inside 315bp area guidance and a 320bp price whisper, was the widest primary print for any Spanish issuer on record.

Intesa Sanpaolo launched a Eu1.5bn 10 year obbligazioni bancarie garantite today (Friday), the first Italian issue of the new year, and one of the most heavily oversubscribed deals of the last two weeks.

Two Swedish transactions appear to have gone smoothly, underscoring in one syndicate banker’s view the “safe haven bid for anything Scandinavian”.

Fitch yesterday (Wednesday) downgraded mortgage backed covered bonds issued by Caja de Ahorros de Murcia from AAA to AA, and removed them from negative review, following its downgrade of Caja Murcia’s issuer rating from A+ to BBB+.

Eurohypo convinced 75 accounts to participate in a Eu1.25bn five transaction yesterday (Wednesday), the majority of which were real money investors with German interest driving demand.

Austria’s Erste Group Bank has closed books on a Eu1bn 10 year benchmark, which is expectred to price in line with guidance of the low 70bp over mid-swaps area. The rare benchmark, jointly led by Barclays Capital, Credit Agricole, DZ Bank and Erste, has proved a runaway success.

Germany’s Eurohypo had the primary market to itself today, launching a Eu1.25bn five year mortgage backed Pfandbrief at 40bp over mid swaps, the middle of guidance. The deal is expected to price this afternoon via leads Commerzbank, Barclays Capital, BNP Paribas, UniCredit and UBS.