Euro

The execution of the Bank of Ireland’s Eu1.5bn covered bond priced yesterday (Wednesday) afternoon was the culmination of a process set in motion by the announcement of the European Central Bank’s Eu60bn purchase programme in early May, the issuer told The Cover, that allowed it to reopen the market for unguaranteed Irish issuance.

Banco Pastor is pricing a Eu1bn four and a half year cédulas hipotecarias issue this (Thursday) afternoon at 75bp over mid-swaps, after confirming the mandate for its new issue yesterday (Wednesday) afternoon.

Bank of Ireland as good as signalled the complete recovery of the covered bond market, in terms of access at least, by launching a Eu1.5bn five year deal that is the first Irish issue in the public markets since June 2007. And while spreads for such issuers may remain at unprecedented levels, the strong rally is nevertheless encouraging many credits to explore possible new issues.

Deutsche Pfandbriefbank yesterday (Tuesday) priced a Eu1.5bn five year mortgage-backed Pfandbrief that marked the Hypo Real Estate group’s post-rescue return to the public funding markets. The issuer pointed to the size of the order book and number of participating accounts as a sign of investors’ readiness to accept Deutsche Pfandbriefbank as an issuer.

Dexia Municipal Agency yesterday (Monday) priced its third obligations foncières jumbo of the year, and the fourth covered bond benchmark for the Dexia group. But a rapid bookbuilding process for the Eu1bn seven year issue showed that investors’ credit lines were still open for further supply from Dexia MA, the issuer told The Cover.

Dexia Municipal Agency today (Monday) launched the first new French benchmark since 16 July, a Eu1bn seven year public sector obligations foncières issue that is due to be priced at the tight end of guidance.

Eurohypo on Wednesday launched its first public sector jumbo Pfandbrief in over two years, a Eu1bn five year deal that was priced at 12bp over mid-swaps. A book in excess of Eu1.5bn underwhelmed some market participants away from the deal, but the issuer told The Cover that it was executed at the right price.

Banesto (Banco Español de Crédito) yesterday (Wednesday) secured the tightest level for a cédulas since the market reopened in May when it priced a Eu1.25bn three and half year mortgage-backed issue at 45bp over mid-swaps. The issuer told The Cover that while other institutions may be waiting for spreads to tighten further, it was happy with its decision to launch a deal in the early days after the summer break.

Banesto (Banco Español de Crédito) this (Wednesday) morning launched the first single issuer cédulas since the beginning of June, a Eu1.25bn three and a half year mortgage-backed issue that will be priced at 45bp over mid-swaps, 75bp tighter than where the issuer sold a four year issue on 26 May.

Eurohypo will today (Wednesday) price a Eu1bn five year public sector Pfandbrief at 12bp over mid-swaps, the tight end of guidance, despite an order book size that left some market participants unimpressed.

Bayerische Landesbank launched the first new jumbo Pfandbrief since early July yesterday (Thursday), but although investors placed orders of almost Eu4bn for the Eu1bn eight year issue, market participants are concerned that German covered bond trading levels may be unsustainable.