Euro

Issuance from Italy, the fastest growing euro covered bond segment, has this year already exceed by almost 20% the total amount sold from that jurisdiction in 2010, according to Natixis analysts.

Société Générale priced the second euro Obligations de financement de l’Habitat on Tuesday, at a level 20bp inside of BPCE’s debut OH with the same maturity in early May. Syndicate leads said a strong reception had been predicted following an in-depth roadshow the previous week, though others said the scale of demand for the debut deal had been surprising nonetheless.

Société Générale convinced almost 150 accounts to participate in its debut euro Obligations de financement de l'habitat. The trade exceeded the already high expectations of syndicate officials following the first euro OH from BPCE.

The covered bond market began the week with a euro benchmark for the first time in almost two months. Following the success of Dexia Municipal Agency’s five year trade on May 12, and the strong reception for short dated core issuance last week, Dexia Kommunalbank launched a three year euro benchmark on Monday

The possibility of a covered bond issuer pricing a deal inside government debt, once considered highly improbable, is now conceivable, say Deutsche Bank and Barclays Capital.

Société Générale SFH has mandated BBVA, Crédit Agricole, Danske, ING, SG and UniCredit for its inaugural euro Obligations de financement de l’habitat, which will be launched in the near future.

CIF Euromortgage surprised market participants on Thursday, bringing a highly successful 10 year trade to a market many had deemed unreceptive to longer tenors. While Bayerische Landesbank and Eurohypo opted for short dated issuance, bookrunners on CIF’s Obligations Foncièrs benchmark trade were not initially confident in the choice of maturity.

After more than a week without benchmark euro issuance, three such deals were launched from core Europe on Thursday, as Eurohypo and Bayern LB came to market at the short end of the curve, while CIF Euromortage opted for a long dated transaction.

CIF Euromortgage mandated for, and then opened, a long 10 year euro trade through BNP Paribas, Deutsche Bank, DZ Bank, Natixis and Nomura. The leads will price the benchmark Obligations Foncièrs later on Thursday, having gone out with guidance of the high 70s over mid-swaps.

Eurohypo will price a benchmark mortgage backed Pfandbrief later on Thursday, having attracted three times as many investors as its last trade, for a transaction three times the size.

Santander priced its first UK RMBS deal of the year on Wednesday. The transaction was notable for its size, strong order book, wide distribution and competitive pricing. The RMBS suggests that a welcome degree of funding equilibrium may slowly be returning to these two key wholesale mortgage funding markets.

Standard & Poor’s on Friday cut public sector backed covered bonds issued by Banco Bilbao Vizcaya Argentaria from AAA to AA+, on negative outlook, because of its criteria concerning the rating of non-sovereign issuers that exceed the rating the sovereign in the European Monetary Union.