Euro

Eurohypo convinced 75 accounts to participate in a Eu1.25bn five transaction yesterday (Wednesday), the majority of which were real money investors with German interest driving demand.

Austria’s Erste Group Bank has closed books on a Eu1bn 10 year benchmark, which is expectred to price in line with guidance of the low 70bp over mid-swaps area. The rare benchmark, jointly led by Barclays Capital, Credit Agricole, DZ Bank and Erste, has proved a runaway success.

Germany’s Eurohypo had the primary market to itself today, launching a Eu1.25bn five year mortgage backed Pfandbrief at 40bp over mid swaps, the middle of guidance. The deal is expected to price this afternoon via leads Commerzbank, Barclays Capital, BNP Paribas, UniCredit and UBS.

Fitch today (Tuesday) placed mortgage covered bonds issued by Caja de Ahorros y Monte de Piedad de Navarra on review for possible downgrade.

Dexia Kommunal Bank sold a Eu1b five year benchmark yesterday (Monday), which leads BayernLB, DZ Bank, Deka Bank, Deutsche Bank, Dexia, HSBC and UniCredit priced at 35bp over mid swaps, the middle of guidance.

After the flurry of four deals that priced yesterday afternoon (See separate comments), the market has gone into radio silence.

CM CIC yesterday priced the first French covered bond to extend beyond the well populated 10-year part of the curve, issuing a Eu1bn 12-year. The 4.125% due 16 January 2023 was jointly led by Barclays Capital, Deutsche Bank and HSBC.

The pricing of LBBW’s three year public sector Pfandbrief yesterday was probably one of the easiest trades of this year. Along with a handful of other German issuers, it is about as far up towards the rates spectrum for covered bonds as any issuer can get.

The primary covered bond market continues to power ahead with four transactions currently being marketed. LBBW, Dexia Kommunalbank, NordLB and CM CIC are in the market with three, five, 10 and 12-year covered bonds respectively.

Rabobank and Royal Bank of Scotland will take Delta Lloyd’s Arena 2011-1 RMBS on the road this week, in what could be the first European RMBS of 2011.

Norddeutsche Landesbank today (Monday) launched a Eu1bn no grow 10 year Pfandbrief, which leads Barclays Capital, BayernLB, Natixis, NordLB and UniCredit will price at 20bp over mid swaps, the middle of guidance.