Euro

Italy’s UniCredit took advantage of a stabilisation of the euro-zone sovereign market to yesterday (Monday) launch a Eu1bn seven year covered bond issue before next week heading into an extended black-out period ahead of a merger of its Italian banking subsidiaries, the issuer told The Cover.

Italy’s UniCredit launched a Eu1bn maximum seven year issue this (Monday) morning that syndicate bankers away from the deal complimented for being “bang-on”, while Spain’s UniCaja is testing investor interest for a Eu500m minimum five year cédulas.

Denmark’s Nykredit Realkredit priced a Eu500m long three year junior covered bond on Friday and the issuer told The Cover that it was pleased with foreign investors’ response to its inaugural euro offering of what represented “senior debt with a twist”.

Supply of sizeable euro covered bonds was this week at its lowest since the benchmark market reopened at the end of August, but activity is expected to pick up again next week, with issuers also said to be preparing for issuance in dollars and niche currencies. Meanwhile, Denmark’s Nykredit Realkredit today (Friday) launched an inaugural euro junior covered bond transaction.

Münchener Hypothekenbank sold a Eu1bn three year Pfandbrief yesterday (Tuesday) that the issuer said benefitted from being in jumbo format and enjoyed a high turnout from Asian investors.

Münchener Hypothekenbank attracted strong demand for a Eu1bn three year public sector Pfandbrief launched today (Tuesday) despite it coming at the tightest level for a sizeable new covered bond since August 2008. Meanwhile, the UK’s Abbey National Treasury Services yesterday sold its third and biggest benchmark of the year.

Abbey National Treasury Services today (Monday) launched a seven year covered bond that is the euro benchmark market’s first new issue since fellow UK issuer Lloyds TSB Bank sold a Eu2bn 10 year deal last Wednesday. Meanwhile, Banco Popular Español has completed an exchange offer and the first jumbo Pfandbrief since June is being prepared.

Lloyds TSB Bank is understood to have attracted more than Eu3bn of demand for a 10 year covered bond this (Wednesday) morning, demonstrating strong support for the long end and UK names. The issue comes after SNS Bank sold a Eu1bn 10 year yesterday (Tuesday), with the issuer citing yield levels as a key factor in its execution.

New issues for GCE Covered Bonds and UniCredit Bank Austria and a large Caja Madrid tap took this week’s supply of Eu500m-plus deals to a solid Eu6.7bn, with GCE said to have benefitted from a recent paucity of new three year issuance from so-called core jurisdictions.

Banca Monte dei Paschi di Siena reached a Eu1.25bn size with its second obbligazioni bancarie garantite benchmark on Tuesday despite coming on a hectic day. The issuer spoke to The Cover about the deal’s timing, maturity and pricing.

A covered bond liability management exercise for Dexia Municipal Agency that closed on Wednesday resulted in the creation of two new issues totalling Eu2bn, with a planned new eight year tranche cancelled due to a lack of demand for that maturity.