Europe

The Netherlands NIBC Bank brought primary market activity to a close this week, launching an inaugural Eu500m three-year deal on Friday via leads LBBW, Natixis, and RBS, which priced the new issue at 105bp over mid swaps.

Axa Bank Europe sold its second ever covered bond on Tuesday, a tightly priced Eu500m five year deal.

Caja Madrid became the latest Spanish name to come to market on Wednesday, though it did not enjoy the tight pricing of its compatriots. Its Eu750m three year cédulas hipotecárias came in the wake of twin Spanish deals from Banesto and BBVA on Monday, which priced inside initial guidance.

Northern Rock has been trying to play down the significance of its first public post-crisis securitisation, a £1.5bn prime RMBS. The state-owned bank was rescued by the UK government in 2007— the bank was heavily dependent on wholesale funding and struggled to finance itself when ABS markets packed up. Its reliance on securitisation was widely blamed for the bank’s fall from grace.

The Federal Deposit Insurance Corp’s intransigent position on the US Covered Bond Act 2011 is likely to provoke increasing ire among US banks as they watch wave upon wave of European issuers taking advantage of liquidity in their own backyard. DNB Nor Boligkredit and Swedbank are the latest to take advantage of this rich seam of competitive financing, raising as much as $4bn between them this week.

Finland’s OP Mortgage Bank has closed books on the second Finnish covered bond of 2011, a Eu1bn five year benchmark deal, on Wednesday.

AXA Bank Europe will price a Eu500m no grow issue at 63bp over mid-swaps later on Tuesday, via leads Bank of America Merrill Lynch, BNP Paribas, Crédit Agricole, HSBC, Natixis, and Société Générale.

Banco Espanol de Crédito sold a Eu600m no grow issue off the back of one of the borrowers largest ever order books on Monday.

Banco Bilbao Vizcaya Argentaria priced the lowest yielding covered bond from a Spanish issuer in the last year on Monday.

The debate around cover pool transparency has once again reared its head after M&G Investments warned that “not all covered bonds are alike and while some are exceptionally strong, the opaque structure of many others could harbour unwelcome surprises for investors.”

The stream of Scandinavian borrowers pricing US dollar denominated covered bonds is continuing, as Moody’s assigned a rating to a Nordea’s new programme and Swedbank priced a dual tranche deal. Other Scandinavians are set to follow.

Deutsche Bank, JP Morgan and Royal Bank of Scotland will sell Northern Rock’s first public post-crisis securitisation, a £1.5bn prime RMBS. The deal will be issued through Gosforth Funding 2011-1, which will be a standalone static pool deal.