Europe

Deutsche Bank brought the covered bond market to the brink of sub-Euribor pricing on Friday, issuing a €750m eight year mortgage Pfandbrief just a single basis point above mid-swaps. With the secondary squeeze grinding onwards syndicate bankers said it was only a matter of time until the Euribor barrier was broken.

Crédit Agricole CIB has been mandated to conduct a roadshow for a deal from Crédit Agricole Public Sector SCF’s new €10bn Obligations Foncières (OF) programme. Standard and Poor’s said the issuer is likely to bring a €1bn deal in September.

OTP Mortgage Bank on Thursday launched the first euro covered bond from Hungary since November 2011, uncovering enough demand to increase a short dated floating rated trade. Meanwhile, National Australia Bank’s recent 14 year sterling offering has widened in the secondary market, after demand proved lacklustre for its attempted long end benchmark.

Credito Emiliano has become the fifth Italian bank to set up a separate covered bond programme to access European Central Bank (ECB) repo funding. But bankers warn that these programmes could have a negative effect on issuers’ original public programmes, even though they help improve banks’ liquidity. This article has one comment.

Moody's has assigned a top rating to Landesbank Berlin’s (LBB) Daheim Series 1-2012 structured covered bond, a deal notable for its lack of a Pfandbrief label.

National Australia Bank opened books on an ultra long dated sterling benchmark on Wednesday hot on the heels of Commonwealth Bank of Australia, which became the first non-UK issuer to tap the sterling long end less than a week ago.

SSA and corporate markets were busy on Tuesday, keeping the primary covered bond quiet. But issuance should improve this week as investors filter back from holiday, said bankers, though they warned that as spreads have tightened a long way in a short time the market may widen after the initial flurry of deals.

Moody’s cut CIF Euromortgage’s covered bonds from triple-A to Aa1 on Tuesday, after lowering the sponsor bank’s senior and short term debt ratings. The Credit Immobilier de France (CIF) group has not yet found a buyer after starting a sale process in June, and though state support is highly likely it remains locked out of the capital market with redemptions approaching.

Four currencies in Europe have seen an unlikely outperformance since the beginning of August; but this will not last, a strategist warns

Germany’s Schuldschein product could be set to develop into a new area, with issuers calling for a secured format.

Amendments, adopted this week, to Germany’s Pfandbrief Act that increase transparency are positive for investors but there will be no ratings impact from the Article 28 changes, said Fitch.

Danish mortgage lenders will benefit from a new best practices aimed at limiting the sale of variable rate and interest only mortgages, said Moody’s on Thursday. The rating agency report came as yields on Nykredit’s one year adjustable rate bonds hit fresh lows, making short dated variable rate mortgages even more attractive.