Euro

Anglo Irish Bank Corp Limited yesterday (Tuesday) launched a buyback offer aimed at all remaining outstanding external covered bonds launched under a UK programme, an operation that an official at the issuer described as a “clean-up exercise”.

These charts and tables provide an overview of covered bond issuance from January-November 2010, breaking down total supply by country, currency, and maturity, and comparing this month's and this year's volumes with those of previous months and years, respectively.

Traditional end-of-year auctions held by Denmark’s mortgage lenders kicked off yesterday (Thursday), with around Dkr537bn (Eu72bn) of interest-reset mortgage bonds lined up for refinancing. Surplus liquidity is expected to contribute to the large volumes being well absorbed despite difficult wider market conditions.

Finland’s Sampo Housing Loan Bank took advantage of calmer market conditions yesterday (Thursday) to price its first benchmark covered bond in four years, and an official at the issuer told The Cover that strong investor feedback had given it the confidence to come to a market that may now be closed for new supply until 2011.

Finland’s Sampo Housing Loan Bank launched a Eu1bn five year benchmark on Thursday, its first covered bond since being acquired by Danske Bank in 2006 and the third Finnish euro issue to hit the market this month. Meanwhile Germany’s DVB Bank has sold its first publicly placed ship Pfandbrief and Dexia Municipal Agency is preparing to meet Australian investors.

Credit Suisse raised Eu1.25bn on Wednesday through its first benchmark covered bond. An official at the issuer told The Cover that the funding instrument proved its worth by attracting investors new to Credit Suisse and facilitating market access despite challenging conditions.

The pace of benchmark covered bond supply could step up a gear this week, with Credit Suisse eyeing the middle of the week for the launch of its inaugural issue, a Dutch bank said to be close to coming to market and others deciding on next steps after having finished roadshows last week. But another issuer has put primary market plans on hold until next year.

Caja Madrid achieved a 20% hit rate on a Eu16.846bn exchange offer that was closed on Friday, with new three year government guaranteed debt providing for the bulk of a maturity extension that the liability management exercise was targeting. The bank was tackling refinancing challenges that Moody’s today (Monday) said was facing Spanish issuers of mortgage backed covered bonds.

While not immune from nervousness triggered by uncertainty about the prospects and structure of a bailout package for Ireland the covered bond market this week held up relatively well, according to syndicate bankers, who attributed thinner liquidity to the approaching end of the year. A large US dollar private placement yesterday (Thursday) wrapped up sizeable new issuance in covered bonds this week.

Bank of New Zealand yesterday (Wednesday) became the first Australasian issuer to sell a covered bond in euros, and an official at the issuer told The Cover that the deal was priced well inside senior unsecured levels on the back of a “respectable” order book.

Bank of New Zealand International Funding, a subsidiary of National Australia Bank, has met with excess demand for a Eu1bn maximum seven year deal that is the first Australasian covered bond to hit the euro market.

A Eu500m five year Pfandbrief for Austria’s Bank für Arbeit und Wirtschaft (Bawag) was largely unaffected by background uncertainty about the prospects of Ireland signing up for financial assistance, although pricing ambitions were slightly reigned in, according to a syndicate official at one of the leads.