Europe

Belgium’s Axa Bank Europe secured the first refinancing of its mortgage business via covered bonds today (Friday), with Axa Bank Europe SCF receiving solid demand for an inaugural, Eu750m 10 year obligations foncières issue.

Fitch downgraded Caixa Económica Montepio Geral from A- to BBB+ , on Rating Watch Negative, yesterday (Thursday), because the Portuguese bank is facing increasing difficulty in defending its asset quality and maintaining operating profitability amid low interest rates and limited prospects for economic growth in Portugal.

SpareBank 1 Boligkreditt sold a $1.5bn (Eu1.077bn) three year benchmark in the US market yesterday (Wednesday) and the issuer told The Cover that the transaction was part of a strategic move to diversify its investor base.

Moody’s downgraded Banca Monte dei Paschi di Siena (MPS) from A1 to A2, on stable outlook, yesterday (Wednesday), because of sizeable challenges facing the Italian bank.

Italy’s Intesa Sanpaolo relaunched issuance of covered bonds secured by residential mortgage backed securities when it yesterday (Wednesday) sold a Eu1bn five year issue that a syndicate official at one of the leads said successfully overcame reduced line availability for Italian debt and some resistance to the deal’s structure. Axa Bank Europe is expected to provide a second test of appetite for such product shortly.

Intesa Sanpaolo has opened books on its first mortgage covered bond, backed by self-originated residential mortgage backed securities, with what a syndicate official described as an “eye-catching” level. Meanwhile, Nordea is preparing a roadshow to introduce Finnish covered bond plans.

A draft Cypriot covered bond law is close to being presented to parliament, after the European Central Bank gave a conditional positive appraisal of the legislation last week.

The French parliament has passed without amendments a law introducing a new type of legislative covered bond, obligations à l’habitat (OHs).

Two inaugural euro covered bonds backed by residential mortgage backed securities were this (Monday) being flagged for possible launch this week.

Royal Bank of Scotland built the second biggest order book for a covered bond this year to price a Eu2bn 10 year deal yesterday (Thursday), which a syndicate banker at one of the leads said was a reward for the careful execution and strong performance of the issuer’s previous transactions. Dexia Kommunalbank Deutschland stuck to the short end of the curve to raise Eu1bn of funding via a three year public sector Pfandbrief.

Fitch upgraded Berlin-Hannoversche Hypothekenbank (Berlin Hyp) from A+ to AA-, on stable outlook, today (Thursday), because of Landesbank Berlin's acquisition of additional shares in Berlin Hyp and announcement that it will enter into a profit and loss transfer agreement with its subsidiary in the near future, subject to shareholder agreement.

Standard & Poor’s affirmed Bank of Ireland Mortgage Bank’s covered bond programme at AAA yesterday (Wednesday), but revised its outlook from stable to negative because of a change to the outlook of Bank of Ireland from stable to negative on 14 September.