Currencies

Demand for Nordea Hypotek’s three year new issue had reached Eu1.5bn by midday today (Thursday) after Barclays Capital, Natixis, Nordea and UniCredit opened books with guidance of the 2bp over mid-swaps area this morning. But the level of demand and the price that Nordea paid has led some market participants to ask why the issuer is visiting the euro market.

NordLB this (Thursday) morning priced its first jumbo Pfandbrief issue since Landesbanks lost their state guarantees in July 2005, a Eu1bn March 2012 public sector Pfandbrief that is one of the most tightly priced issues since the summer.

Calyon, Credit Suisse and Dresdner Kleinwort opened books on a three year obligations foncières issue for Dexia Municipal Agency this (Wednesday) morning and were quickly able to generate Eu1.8bn of orders at price guidance of 3bp through mid-swaps. The books have been closed, but despite market participants viewing the pricing as attractive, the spread has been fixed in the middle of guidance.

The execution of the Eu1.05bn two year IM Cédulas 12 issue has shown that while the cédulas market is open, it is barely ajar. When the books were closed yesterday (Tuesday) afternoon the deal was only just oversubscribed, and Ahorro Corporación Financiera remains undecided over whether or not to tap the market next week with a Eu1bn-Eu1.5bn three to five year AyT Cédulas Cajas issue.

Orders on NordLB’s Eu1bn March 2012 public sector Pfandbrief had reached Eu1bn by midday at price guidance of 3bp under mid-swaps, as the deal faced stiff competition in the market from competitors, and some market participants said the pricing looked rich. Meanwhile German supply is set to increase further, with HVB mandating a new jumbo this (Wednesday) morning.

Eurohypo’s Eu2.5bn five year jumbo mortgage Pfandbrief issue was priced this (Tuesday) morning at 2bp over mid-swaps after leads Barclays Capital, BNP Paribas, Commerzbank and Dresdner Kleinwort received orders totalling Eu3.7bn. Meanwhile NordLB is set to launch the third jumbo Pfandbrief in two weeks.

Bookbuilding for IM Cédulas’s Eu1.05bn two year multi-issuer deal got off to a steady start this morning, with its Eu500m of demand in the first two hours reflecting the measured pace of the five year Santander trade that reopened the cédulas market two weeks ago.

Eurohypo is set to price a Eu2bn five year jumbo mortgage Pfandbrief at mid-swaps plus 2bp, having built a book of Eu3.5bn by 1pm. Bookbuilding began today (Monday) at 9am CET with price guidance of the mid-swaps plus 2bp area.

The maturity of IM Cédulas XII has been fixed at two years and Barclays Capital, Commerzbank, LBBW and Natixis are expected to launch the deal in the coming days. Other issuers, however, are said to be holding off from confirming mandates given the redoubling of risk aversion in the market.

DnB Nor’s Eu1.5bn three year covered bond proved a hit with investors yesterday (Wednesday), attracting Eu3.8bn of orders in three hours, enabling the leads to tighten pricing from the 3bp area guidance to 2bp over mid-swaps.

Compagnie de Financement Foncier priced its Eu1bn seven year obligations foncières issue in the middle of mid-swaps plus 3bp guidance this (Thursday) morning, in the face of the weaker tone this week and also the number of deals it has issued since September.

Compagnie de Financement Foncier opened books on a seven year benchmark this (Wednesday) morning at guidance of 3bp over mid-swaps, the same level at which Dexia Municipal Agency priced a Eu1.5bn 10 year obligations foncières issue only last week.