Europe

Standard and Poor’s brutal six notch downgrade of the Depfa ACS public sector backed covered bonds, from double A to triple B, matches the severity of downgrades that have been seen in several Spanish multi-Cédulas deals. But unlike those deals, this deal was issued by the Irish entity of a German parent bank.

Dollar issuance continued its record breaking run on Tuesday, as UBS launched its second benchmark of 2012 in that currency. Sterling and dollars have had record first quarters, though euro supply remains subdued.

Investor appetite for Lloyds, the UK bank, appears to know no bounds. After issuing an ABS CLO and a dollar denominated senior unsecured deal this week, the borrower came back for its third public covered bond deal and it second ultra-long dated sterling deal of the year.

WL Bank priced its first deal since May last year and the first 10 year Pfandbrief of the year. Despite coming at a tight spread, relative to other covered bond sectors, it sold out within an hour and was heavily oversubscribed.

Nationwide spurned the euro market again and instead turned to the US and UK for its first RMBS deal of the year. Taking account of the two year longer maturity, the funding level was tighter compared to its recent sterling covered bond and illustrated the US market’s greater familiarity with ABS in general and UK deals in particular.

Portugal’s Caixa Geral de Depósitos (CGD) bought €908m of its own covered bonds, representing 29% of the outstanding. This is the second highest take up of a covered bond tender and well above the level that the borrower had aimed for. Millennium BCP’s tender, due next week should have an equally strong result.

Although the technical market backdrop continues to look strong, fundamental concerns lurk just below the surface. In the last 48 hours both Pimco and the prime minister of Luxembourg have raised concerns about the outlook for Greece and the rest of Europe. Against this backdrop, German Pandbriefe cover pools are still exposed to peripheral Europe, latest analysis shows.

Top tier names can offer zero premiums on primary trades but lower ranked issuers have no such luxury, syndicate officials told The Cover on Monday.

Australia and New Zealand Banking Group looks set to become the third Australian borrower to issue in its domestic currency. ANZ has mandated leads for a four year dual tranche, fixed and floating rate benchmark. Westpac has issued its first deal denominated in Swiss Francs

BNP Paribas priced a heavily oversubscribed 10 year trade through its outstanding curve on Thursday, opening the door to a world of negative new issue premiums.

Stadshypotek built the largest ever order book for a Nordic covered bond on Wednesday, with the year’s first euro benchmark from a Swedish issuer.

DNB Boligkreditt showed that, for the right name from the right jurisdiction, yield hungry investors will make concessions to get exposure. The strength of interest for its latest 10 year offering allowed it to push both spread and size, and still leave appetite unsated.