Currencies

Compagnie de Financement Foncier priced its first benchmark of the year this morning, a Eu1.5bn three year obligations foncières priced at 3bp over mid-swaps. The Cover spoke to Paul Dudouit, head of funding at CFF, about the issuer’s start to 2008.

Lead managers Calyon, HSBC and Natixis have opened books on a new three year obligations foncières (OF) for Compagnie de Financement Foncier (CFF). The deal’s pricing and reception have given further clues to the shape of the new French issuing world, as well as other top notch covered bonds such as Pfandbriefe.

Dexia Municipal Agency has priced its long-awaited Eu2bn long five year deal at 4bp over mid-swaps, redrawing the obligations foncières pricing map and the pricing landscape for other issuers at the tight end of the market.

Dexia Municipal Agency is set to price a new five year issue at guidance of 4bp over mid-swaps through ABN Amro, Deutsche Bank and SG CIB, having built a book of over Eu2bn. Read The Cover tomorrow for the full story and the new pricing paradigm for obligations foncières.

Like other issuers to have tapped the covered bond market so far this year, DnB Nor paid up to access the market last week, but Thor Tellefsen, senior vice president of investor relations and long term funding at DnB Nor, told The Cover today that the price was worth paying.

BN Boligkreditt has opened the books on its debut Eu1bn five year covered bond and by lunchtime had attracted some Eu600m of orders at guidance of the 15bp over mid-swaps area, with volatile equity markets providing an unhelpful backdrop.

DnB Nor brought the second week of the covered bond year to a successful close today, pricing its five year deal in the middle of the 11bp over mid-swaps area guidance and at a size of Eu2bn. But whether next week’s supply will match the Eu8bn plus of the past few days remains unclear.

BNP Paribas’ Eu2bn three year covered bond was priced this morning, although there are doubts over whether this represents a full reopening of the French market, with pricing still disjointed even within jurisdiction due to varying collateral types, name differentiation and the choice between structured covered bonds or the old obligations foncières.

Kommunalkredit Austria priced a Eu1bn four year covered bond at mid-swaps flat this morning, as expected, but while the transaction shows how the most sought after names can avoid the worst of the spread widening, questions remain over what whether anything can be printed any tighter.

The books have opened on DnB Nor Boligkreditt’s five year benchmark covered bond, and the deal’s swift progress has further demonstrated the divisions in the market, which is in particular benefiting established names.

Bank of Montreal is set to price its Eu1bn five year covered bond at 24bp over mid-swaps today, paying 4bp more than Royal Bank of Canada did for its 10 year deal last week, after suffering from the wider than expected pricing of Banco Espiríto Santo’s Eu1.25bn three year deal at 20bp over on Tuesday.

BNP Paribas Covered Bonds priced its three year issue in the middle of guidance and with a size of Eu2bn this lunchtime, having built a book of more than Eu3bn in what one syndicate official away from the deal called the most successful deal of the week. However, the pricing outlook for French covered bonds is unclear, with the Banque Populaire group (BFBP) coming out with guidance of 20bp-22bp over and still no sign of a deal from Compagnie de Financement Foncier, which gave a mandate for an issue at the beginning of last week.