Euro

Primary covered bond activity is expected to moderate next week with anywhere between four and eight deals possible, following 10 this week. Though spreads are wider now than before the covered bond purchase programme (CBPP3) was announced, investors are not taking advantage of the bargains on offer because liquidity is so poor.

The London branch of the Japanese firm has put two bankers ‘at risk,’ one of whom had been actively involved in emerging markets, covered bonds and SSA syndicate.

A senior FIG syndicate banker has quit BNP Paribas to move to Danske Bank in Copenhagen.

The European Commission (EC) has published a report in which it agrees with the recommendations of the European Banking Authority (EBA) that the preferential risk weight of qualifying covered bonds is appropriate. It also opens up the possibility of extending preferential treatment to dual recourse bonds backed by SME collateral, or European Secured Notes.

The Norwegian covered bond borrower issued its second deal of the year on Wednesday. Though the final spread was on the generous side, and the book only just covered, the overall cost of funding was less than half what it paid in March.

A year after issuing its last euro denominated benchmark, Caisse Centrale Desjardins du Quebec (CCDJ) has mandated leads for a European roadshow.

Four issuers launched covered bonds on Tuesday following the four that launched deals on Monday, doubling supply from €3bn to €6bn so far this week. By virtue of its size, Compagnie de Financement Foncier’s (CFF) €1.25bn benchmark stood out, but the level of demand was far below its previous five year even though the concession was several times larger.

Covered bond sentiment has improved slightly from June, with investors becoming less pessimistic, according to a survey compiled by Crédit Agricole CIB research. Issuers have become less optimistic, but overall it is still a sellers’ market.

Moody’s has assigned a provisional Aaa rating to €8.6bn of class ‘A’ notes to be issued by FCT Crédit Agricole Habitat 2015, a vehicle for home loans originated by 39 regional French banks belonging to Crédit Agricole.

WL BANK AG has mandated leads for an eight year mortgage backed covered bond and Banca Monte dei Paschi di Siena (MPS) has mandated leads for its first conditional pass through, a long six year. Both transactions are likely to be priced on Tuesday.

Banca Carige raised €500m of five year covered bond funding on Monday with the rare 100bp spread providing enough juice to tempt some investors into the book, despite its junk rating from Moody’s.

Santander Totta issued the second only covered bond from Portugal this year on Monday. Despite a low cover ratio the deal was diversely distributed.