Euro

Banco Espírito Santo has enjoyed a turbulent first year in the covered bond market, with praise for its new Eu1.25bn two year for keeping the primary market open contrasting with the criticism it received after its debut Eu1.25bn three year in January pushed secondary spreads wider. The Cover spoke to Paul Ferreira, head of funding at BES, about its new issue and future plans.

After Banca Popolare Milano brought the first obbligazioni bancarie garantite to market, The Cover spoke to Enzo Chiesa, chief financial officer at BPM, about how one of Italy’s regional players came to end the long wait for Italian covered bonds.

In brief: FHB Mortgage Bank has mandated RZB for a Eu100m covered bond to be launched next week. The July 2011 FRN is expected to be priced in the 125bp over Euribor area.

Banco Espírito Santo priced only its second covered this (Thursday) morning and the final size was enough to make it the largest covered bond in over a month. Those outside the deal said it was a pleasant surprise that two benchmarks could be priced during a bumpy week.

Banco Espírito Santo opened books on a new short dated mortgage backed transaction this (Wednesday) morning, apparently refuting suggestions that conditions had turned against a second new benchmark this week. Bankers with outstanding mandates from Italy and Portugal admitted that this turn of events could cause them to readjust their plans, but only if the issuance window can be held open in the face of pressure from the wider financial markets.

Dexia LdG Banque could become a regular visitor to the public markets after its debut benchmark this autumn, Véronique Hugues, global head of long term funding at Dexia, told The Cover yesterday (Monday).

Banca Popolare di Milano (BPM) yesterday (Monday) priced the first Eu1bn covered bond since Caja de Ahorros del Mediterráneo’s two year in mid-June. However, market participants said that today’s plummeting equity markets had sunk any hopes of a meaningful recovery.

Banca Popolare di Milano (BPM) took the plunge before the summer break this morning, opening books on it debut euro benchmark covered bond, the first from Italy. One syndicate manager outside the deal welcomed it for establishing Italy where it belonged in his view, although disconcertingly for fans of orthodox geography he suggested this was somewhere between France and Portugal.

“What do Dexia Kommunalbank, EIB, Hypo Real Estate International, DexMA, Berlin Hyp, WL Bank and NRW.Bank all have in common?” asked Dresdner Kleinwort’s analysts in their latest Pfandbrief Weekly yesterday (Wednesday).

Deutsche Apotheker- und Ärztebank (apoBank) failed to reach its stated ambition yesterday (Tuesday), when it was forced to price a sub-benchmark sized deal despite targeting a jumbo debut. Market participants were split on whether this and other recent struggles have been caused by bad luck or bad advice.

Deutsche Apotheker und Ärztebank (apoBank), Germany’s largest primary co-operative bank, opened books on its debut mortgage Pfandbrief this (Tuesday) morning. Bookbuilding was proving to be a drawn out process, with several factors said to be working against apoBank.

Caja de Ahorros del Mediterráneo continued the Spanish march to increasingly wide levels when it priced its debut Eu1bn two year cédulas on Friday afternoon. Despite claims last week that this was damaging the wider market, one lead manager robustly defended the pricing, saying it should have no impact on core names.