Euro

Euro benchmark covered bond year-to-date supply is the lowest in the last decade as a series of macro events, combined with banks’ increasing focus on bail-in, have kept activity to a minimum.

Westpac NZ is marketing a new euro-denominated covered bond as another China-related sell off kept primary activity to a minimum on Monday.

ING Bank has updated its prospectus for the second time this year enabling it to issue soft bullet covered bonds. Analysts at ABN research believe this could be a precursor to a hard to soft bullet exchange.

Banca Popolare di Milano (PMIIM), has mandated leads to market a covered bond from its newly structured shelf, which is rated A2 with Moody’s only.

Standard and Poor’s has implemented its new rating method for Spanish multi-Cédulas programmes and announced a series of rating upgrades, downgrades and affirmations on the 32 deals it rates. The rating action should lower capital charges on some weaker deals.

Depfa ACS Bank has only one rating remaining after Standard & Poor’s became the second agency to withdraw its covered bond rating this week. Analysts suggest this could result in forced selling of Depfa’s covered bonds if Moody’s follows suit, but they still believe that the bonds will be paid out in full.

Austrian covered bonds have been largely unaffected by the reinstatement of the State of Carinthia’s guarantee and the ensuing downgrade by Moody’s of the state to B3, according to analysts at LBBW.

The newly set up Dutch mortgage bank, Solid Mortgages, is planning to introduce the Danish mortgage system to the Netherlands. Following a presentation to be made this September in Barcelona, the first transaction from Solid could emerge early in 2016, if not before.

Crédit Agricole Home Loan SFH issued a €200m tap of a seven year benchmark covered bond on Thursday. The small tap presented minimal execution risk and was priced with little concession to the curve.

Peripheral covered bonds have performed well lately, especially relative to the long end of the French market where selective sellers were reported on Wednesday. But once the covered bond purchase programme (CBPP3) has finished, peripheral markets are likely to be the most vulnerable.

The Bank of Scotland has become the first bank to not get approval to switch some of its covered bonds from a hard to soft bullet repayment. Though it did get approval to switch the majority of deals to a soft bullet, the result suggests investors are finally starting to assert their rights.

At least three Turkish banks have set up covered bond programmes and could theoretically be ready to issue their first benchmarks this autumn. However, even if the political outlook improves, the cost of funding in dollars using established senior unsecured programmes may be difficult to beat.