Euro

Royal Bank of Canada (RBC) looks set to successfully re-open the long end of the covered bond market. Pricing of 20bp over mid-swaps proved enough to attract Eu1.46bn of orders, allowing the final size of the deal to be set at Eu1.25bn. Final pricing is expected this afternoon (Wednesday).

Skandinaviska Enskilda Banken AB (SEB) has priced its inaugural euro jumbo covered bond at 3bp over mid-swaps, at the tight end of the 4bp guidance. A final size of Eu1.5bn was decided on the three year deal after the bond attracted Eu4bn of orders.

Caisse de Refinancement de l’Habitat had built a book of over Eu1.5bn for its new two year jumbo today and more than Eu300m for its tap, with pricing expected tomorrow.

The champagne was out for the launch of the first ever jumbo ship Pfandbrief, HSH Nordbank’s two year deal, which attracted more than Eu3bn of orders by midday CET and could be priced at the tight end of guidance.

Royal Bank of Canada (RBC) restarted 10 supply by boldly announcing such a mandate yesterday (Monday), attempting to follow the success of its debut five year with a 10 year euro jumbo in the face of a market that had proved hostile to both structured covered bonds and longer dated maturities.

Skandinaviska Enskilda Banken AB (SEB) has opened the books on its first euro covered bond, a three year jumbo with pricing set at 3bp over mid-swaps, the tight end of the 4bp guidance. The deal proved extremely popular with investors, gathering well in excess of Eu4bn of orders by midday.

Compagnie de Financement Foncier (CFF) has mandated Calyon, HSBC and Natixis for its benchmark sized obligation foncière to be launched in the near future. Lead managers are believed to be keeping their options open on the maturity of the deal.

Deutsche Postbank finishes the roadshow for its debut jumbo mortgage Pfandbrief tomorrow (Friday) and could be one of the first issuers into the market in the New Year. Marcus Chromik, head of primary capital markets at Postbank, told The Cover that with everyone hoping that high quality credits will reopen the market, Postbank could deliver just what the market is looking for.

The wisdom of AIB Mortgage Bank’s decision to try to issue a three year covered bond via Barclays Capital, BNP Paribas and Deutsche Bank this week was being questioned today after the bank’s decision to pull its issue yesterday (Tuesday). While market participants understood the decision to suspend its issue in light of the deterioration in market conditions, they asked why AIB tried to come to such an oversupplied and fragile market with a deal that has now only further undermined sentiment.

AIB Mortgage Bank has taken the unprecedented step of postponing its planned three year covered bond more than a day after opening books for the issue, citing the “extreme volatility in the credit markets”. The decision threatens to further damage sentiment in the covered bond market, which one syndicate manager described as “poisoned”.

Bayerische Hypo- und Vereinsbank could breathe a sigh of relief today (Tuesday), pricing its Eu1bn five year mortgage Pfandbrief in the middle of 3bp over mid-swaps guidance just before the primary market appeared to close for new issuance.

HVB was said to be weathering the storm in the covered bond market reasonably well today (Monday), having built a book of Eu1.5bn for a deal limited at that size at guidance of 3bp over mid-swaps. Investors put its success down to German issuers’ domestic support.