Currencies

BNP Paribas home loan bank attracted over 100 accounts to participate in a Eu1.75bn 10 year issue yesterday (Tuesday), which leads BNP, Natixis, RBS and UniCredit priced at 65bp over mid swaps.

Primary issuance continues to power ahead with five deals pricing yesterday and a further five deals expected to price this afternoon. Several more have been announced but, in a possible sign of things to come, two have been postponed and there is speculation that another is struggling.

ING sold a Eu1.25bn seven year transaction yesterday (Tuesday), which priced at 60bp over mid-swaps, in line with guidance, via leads Barclays, ING, Natixis and UniCredit.

After a very quiet December, market participants are not surprised to see a strong start to the primary market in the New Year, with one deal already priced and as many as seven others on the way.

Germany’s Münchener Hypothekenbank reopened the covered bond market on Monday, pricing a Eu1bn five year mortgage backed Pfandbrief at 10bp over mid swaps, the tight end of guidance, via leads Barclays, DZ Bank, LBBW, UniCredit and WGZ Bank.

Congressman Scott Garrett, the Republican politician who has been leading a push for covered bond legislation in the US, has been selected to serve as chairman of the capital markets subcommittee in the House of Representatives, an appointment that US lawyers and market observers cited as one of several grounds for optimism that legislation could be passed next year.

German 10-year Bunds are correcting slightly higher this (Friday) morning, but a long term trend of rising yields that has been in place since August remains intact. As a result, real money accounts are increasingly hitting their target returns –a driving factor behind a hugely upsized increase of a tap for Caisse de Refinancement de l’Habitat.

The Bank of Scotland, a subsidiary of the Lloyds Group, has restructured as many as eight covered bonds in an exercise that could be constituted as a preliminary move ahead of potentially issuing into the public market.

Following its redraft in July, the final version of the Basel III rules is expected to be released later this week. Bankers do not expect too many major surprises but, adhering to liquidity buffers is likely to be a challenge in some parts of the world – particularly in Australia.

Anglo Irish Bank Corp Limited yesterday (Tuesday) launched a buyback offer aimed at all remaining outstanding external covered bonds launched under a UK programme, an operation that an official at the issuer described as a “clean-up exercise”.

These charts and tables provide an overview of covered bond issuance from January-November 2010, breaking down total supply by country, currency, and maturity, and comparing this month's and this year's volumes with those of previous months and years, respectively.

Traditional end-of-year auctions held by Denmark’s mortgage lenders kicked off yesterday (Thursday), with around Dkr537bn (Eu72bn) of interest-reset mortgage bonds lined up for refinancing. Surplus liquidity is expected to contribute to the large volumes being well absorbed despite difficult wider market conditions.