Europe

Scandanvian borrowers have joined their French and German core colleagues to take advantage of a market highly receptive to quality issuance. SpareBank 1 Boligkredit tapped the dollar space on Tuesday, while Nordea Bank Finland priced a well oversubscribed three year euro trade on Thursday. Aktia real estate mortgage bank has mandated banks for a series of investor meetings beginning in early June.

Benchmark issuance in the covered market continued for the third straight day on Wednesday, heralding a return to the form of early in the first quarter. Caisse de Refinancement de l’Habitat on Wednesday launched the second French long 10 year within a week, keeping books open for only half an hour for a Eu1.25bn trade.

Dexia Kommunalbank braved a difficult market on Monday to print a Eu1bn 2.75% May 2014 issue. Though not quite as well received as Dexia Municipal Agency’s Obligations Foncières two weeks ago, the benchmark public sector Pfandbrief was priced in line with guidance and enjoyed strong participation from domestic investors.

Two European banks have issued benchmark dollar covered bonds this week, taking advantage of US investor interest in triple-A assets.

Issuance from Italy, the fastest growing euro covered bond segment, has this year already exceed by almost 20% the total amount sold from that jurisdiction in 2010, according to Natixis analysts.

Société Générale priced the second euro Obligations de financement de l’Habitat on Tuesday, at a level 20bp inside of BPCE’s debut OH with the same maturity in early May. Syndicate leads said a strong reception had been predicted following an in-depth roadshow the previous week, though others said the scale of demand for the debut deal had been surprising nonetheless.

Standard & Poor’s placed Intesa Sanpaolo and three other Italian banks on rating watch negative on Tuesday, and affirmed Intesa’s A+/A-1 counterparty rating.

Ratings agencies and covered bond analysts have still not reached a consensus over the most efficient way to mitigate against refinancing risk following a segregation event.

Société Générale convinced almost 150 accounts to participate in its debut euro Obligations de financement de l'habitat. The trade exceeded the already high expectations of syndicate officials following the first euro OH from BPCE.

The eurozone sovereign debt crisis has tested the covered bond product like never before. Katie Llanos-Small examines how covered bonds from the periphery have performed during the crisis, and asks what might happen if a eurozone sovereign were to default.

Hypo Real Estate Group has predicted that its profitable first quarter will lead to a profitable 2011 as a whole.

The covered bond market began the week with a euro benchmark for the first time in almost two months. Following the success of Dexia Municipal Agency’s five year trade on May 12, and the strong reception for short dated core issuance last week, Dexia Kommunalbank launched a three year euro benchmark on Monday