Euro

Münchener Hypothekenbank today (Thursday) became the fifth institution to tap outstanding issuance this month, with flows in jumbo covered bonds proving encouraging, and another tap is said to be underway.

The recent trend of covered bond issuers tapping outstanding jumbos continued today (Tuesday), while one French name is said to have this week tested investor sentiment for a new issue.

Société Générale SCF is increasing its recent Eu1.25bn 10 year public sector obligations foncières issue by Eu1bn after encountering strong real money demand for the tap. Meanwhile a rare, if modest and privately placed, dollar issue was executed yesterday (Wednesday).

A Eu125m tap for Eurohypo has been the only jumbo covered bond activity so far this week, with the Easter holidays and competition from other asset classes stymieing new issuance.

Landesbank Baden-Württemberg yesterday (Tuesday) tapped its Eu1bn February 2014 Pfandbrief, and Caisse de Refinancement de l’Habitat is today (Wednesday) also taking advantage of a “perfect week” to increase the 10 year Eu1bn issue it priced on 25 March.

The jumbo market looks set for a quiet four day week, despite syndicate officials saying that market conditions are favourable for issuance. The situation on the government-guaranteed market is hardly different, with Fortis the only borrower active today (Monday) and no other issues said to be in the immediate pipeline.

Caixa Galicia has closed books on a Eu1.25bn three year government guaranteed issue that it is due to be priced this (Friday) afternoon, rounding off a week in which Spanish issuers fared better than some market participants had been expecting after Caja de Ahorros de Castilla-La Mancha had to be rescued last weekend.

* These banks were not ranked in the top 20 in the all euro & dollar benchmark league table at the end of Q1 2008.

The rescue of Caja Castilla-La Mancha at the weekend has not deterred Spanish issuers from approaching the government-guaranteed market, with Caja Madrid today (Tuesday) announcing the mandate for a three year deal.

Caisse de Refinancement de l’Habitat yesterday (Wednesday) returned to the jumbo market with a 10 year covered bond priced at the same level as last week’s Société Générale SCF obligations foncières in the same maturity. This achievement was hailed by market participants, although the issuer was not completely satisfied.