Europe

The benchmark covered bond market opened for issuance on Tuesday, but was restricted to a Eu350m tap of a 4% October 2025 Crédit Agricole deal. But Spain’s Cajamar is also testing investor interest for an increase of a 3.5% October 2014 issue with what would be the widest spread so far in the benchmark market.

The primary market for benchmark covered bonds was quiet this (Monday) morning, with public holidays in many parts of continental Europe a contributing factor, but one of several Spanish banks to have reported third quarter results is said to be considering accessing the market.

A 10 year obligations foncières issue launched by Compagnie de Financement yesterday (Thursday) reached the Eu1bn mark that an official at the issuer told The Cover was “a definite focus” for its tapping of what she described as a very technical part of the curve.

Concrete plans for new issue projects next week appeared thin on the ground this (Friday) morning, but this could be a misleading indicator of forthcoming supply. At least three issuers are on the road next week, Spanish banks are emerging from blackout periods, and bankers said that French issuers are likely to be encouraged by a successful Compagnie de Financement Foncier Eu1bn 10 year transaction sold yesterday.

Banca Popolare di Milano maintained a promise to investors to issue a sizeable covered bond once a year when it on Tuesday sold a Eu750m five year obbligazioni bancarie garantite issue, an official at the issuer told The Cover.

Compagnie de Financement Foncier took advantage of an increase in yields to launch a Eu1bn 10 year obligations foncières issue today (Thursday), its third and longest dated Eu1bn or greater deal of the year.

Swedbank Mortgage priced its fourth euro benchmark covered bond of the year on Tuesday, a Eu1bn long three year deal that the issuer told The Cover was motivated in part by publication of robust third quarter figures.

Fitch downgraded mortgage backed covered bonds issued by Caixa Económica Montepio Geral from AAA to AA, on negative review, yesterday (Tuesday), because of new asset analysis assumptions for Portuguese mortgages.

Fitch put public sector covered bonds issued by Depfa ACS Bank on negative review today (Wednesday) because of the potential impact of the issuer’s business restructuring.

Banca Popolare di Milano, Kutxa and Swedbank Mortgage accessed the benchmark covered bond market this (Tuesday) morning to offer investors a medley of new euro issues after a day of preparation yesterday that one syndicate banker said was necessitated by limited liquidity in the market.

Axa Bank Europe SCF inaugurated a Eu5bn obligations foncières programme on Friday with a Eu750m 10 year deal that an official at the issuer told The Cover represented “a big success”. He also discussed the choice of the French instrument and the use of RMBS as collateral.

Swedbank Mortgage and Banca Popolare di Milano are lining up new issues that will probably be executed tomorrow (Tuesday), after syndicate bankers said the market opened strongly today.