Euro

DG Hypothekenbank has mandated leads for a seven year mortgage covered bond to be launched early next week.

HSH Nordbank opened books on Thursday for a deal which took advantage of Europe’s core markets’ recent tightening versus its periphery. Leads produced an oversubscribed book as Bunds rallied and peripheral sovereigns continued to struggle.

Goldman Sachs will give investors more time to understand the unique structure of its Fixed Income Global Structured Covered Obligation (Figsco) and appreciate just how different it is from a pure market value deal, or a covered bond (This story has one comment).

HSH Nordbank has mandated joint leads for a €500m five year mortgage Pfandbrief, which is expected to be priced on Thursday. Market conditions for core issuers look favourable with Bund yields tightening further.

Banca Monte dei Paschi di Siena (MPS) took advantage of its new position among covered bond investment grade borrowers to take a 10 year benchmark to market on Tuesday. Given its €1bn seven year tap in April attracted one of the highest oversubscriptions of any covered bond of that size this year, expectations for Tuesday’s deal were high. But on that basis the deal disappointed, despite it delivering another €1bn for the issuer.

The cover pool backing Goldman Sachs’ fixed income global structured covered obligation (Figsco) programme is too weak to secure a rating uplift to the issuer of the underlying special purpose vehicle — Goldman Sachs Mitsui Marine Derivatives Products (GSMMDP), the joint venture guaranteed by Goldman Sachs and Mitsui Sumitomo Insurance, Fitch said on Monday.

UniCredit Bank Austria (UBA) has tripled the share of non-profit housing loans in its mortgage pool in a year and reduced the share of riskier commercial mortgages, in a move which Moody’s said was credit positive for its Aa1 programme.

Covered bond issuance in June was the strongest since 2011 and issuance over the year as a whole is in line to meet the €130bn forecast that Barclays research analysts made in December last year, the bank said on Thursday. UK, Canadian and Italian issuance may bolster supply over the second half of the year other bankers and analysts said.

Bayerische Landesbank took advantage of an empty market to price what could be one of the last covered bonds before the summer lull kicks in. The €500m seven year Pfandbrief attracted a substantially oversubscribed and granular book that gained solid momentum from the start — in contrast to other recently issued Pfandbrief.

Standard & Poor's upgraded BBVA’s mortgage backed covered bond programme from A to AA- after the European close on Tuesday, while Fitch upgraded UniCredit’s Italian programme from A+ to AA-. The upgrades take the programmes towards a level that gives regulatory benefits. UniCredit has most to gain.

Canadian Imperial Bank of Commerce recently updated its covered bond prospectus, giving rise to speculation that it could return to the covered bond market this year. CIBC is only one of two Canadian banks that have not issued in euros in 2014 and was last seen in the market in July 2013.

Arrears in foreign assets backing German mortgage Pfandbrief increased by 40% in the first quarter of 2014, according to Moody’s, although the share of foreign mortgages in Pfandbrief cover pools is on a steady decline.