Euro

AIB Mortgage Bank was said to be struggling to build a book for its three year mortgage backed jumbo covered bond this (Monday) morning at guidance of 10bp over mid-swaps as the heavy pipeline appeared to have finally broken the primary market’s back, with covered bond investors finding plenty of reasons not to buy. Abbey is said to have postponed its planned issue in light of the torrid conditions.

Nordea Hypotek priced its Eu1.25bn three year Swedish covered bond at 2bp over mid-swaps this (Friday) morning, after leads Barclays, Natixis, Nordea and UniCredit closed books with just over Eu2bn of orders yesterday. The level of demand was seen by the issuer as supportive of its diversification strategy.

Dexia Municipal Agency’s Eu1.5bn three year obligations foncières issue was priced yesterday (Wednesday) at 3bp through mid-swaps after the swiftly executed deal attracted more than Eu2.2bn of demand by 2pm CET. Market participants said yesterday that the French issuers’ ability to execute quickly was thanks to the attractive pricing level versus recent German and other French supply.

Demand for Nordea Hypotek’s three year new issue had reached Eu1.5bn by midday today (Thursday) after Barclays Capital, Natixis, Nordea and UniCredit opened books with guidance of the 2bp over mid-swaps area this morning. But the level of demand and the price that Nordea paid has led some market participants to ask why the issuer is visiting the euro market.

NordLB this (Thursday) morning priced its first jumbo Pfandbrief issue since Landesbanks lost their state guarantees in July 2005, a Eu1bn March 2012 public sector Pfandbrief that is one of the most tightly priced issues since the summer.

Calyon, Credit Suisse and Dresdner Kleinwort opened books on a three year obligations foncières issue for Dexia Municipal Agency this (Wednesday) morning and were quickly able to generate Eu1.8bn of orders at price guidance of 3bp through mid-swaps. The books have been closed, but despite market participants viewing the pricing as attractive, the spread has been fixed in the middle of guidance.

The execution of the Eu1.05bn two year IM Cédulas 12 issue has shown that while the cédulas market is open, it is barely ajar. When the books were closed yesterday (Tuesday) afternoon the deal was only just oversubscribed, and Ahorro Corporación Financiera remains undecided over whether or not to tap the market next week with a Eu1bn-Eu1.5bn three to five year AyT Cédulas Cajas issue.

Orders on NordLB’s Eu1bn March 2012 public sector Pfandbrief had reached Eu1bn by midday at price guidance of 3bp under mid-swaps, as the deal faced stiff competition in the market from competitors, and some market participants said the pricing looked rich. Meanwhile German supply is set to increase further, with HVB mandating a new jumbo this (Wednesday) morning.

Eurohypo’s Eu2.5bn five year jumbo mortgage Pfandbrief issue was priced this (Tuesday) morning at 2bp over mid-swaps after leads Barclays Capital, BNP Paribas, Commerzbank and Dresdner Kleinwort received orders totalling Eu3.7bn. Meanwhile NordLB is set to launch the third jumbo Pfandbrief in two weeks.

Bookbuilding for IM Cédulas’s Eu1.05bn two year multi-issuer deal got off to a steady start this morning, with its Eu500m of demand in the first two hours reflecting the measured pace of the five year Santander trade that reopened the cédulas market two weeks ago.

Eurohypo is set to price a Eu2bn five year jumbo mortgage Pfandbrief at mid-swaps plus 2bp, having built a book of Eu3.5bn by 1pm. Bookbuilding began today (Monday) at 9am CET with price guidance of the mid-swaps plus 2bp area.

The maturity of IM Cédulas XII has been fixed at two years and Barclays Capital, Commerzbank, LBBW and Natixis are expected to launch the deal in the coming days. Other issuers, however, are said to be holding off from confirming mandates given the redoubling of risk aversion in the market.