Europe

Eurohypo is understood to have called off a three year dollar benchmark transaction it was preparing yesterday (Wednesday) after generating scant demand, with the deal’s documentation said to have been a key reason for this.

Investors flocked to a Eu2bn Royal Bank of Scotland covered bond today (Thursday), attracted by the opportunity to lock in a 4% coupon for 10 years, while a Eu1bn three year Dexia Kommunalbank Deutschland issue was also oversubscribed as primary market activity stepped up a gear following a Eu1bn deal from BNP Paribas Public Sector SCF yesterday.

BNP Paribas Public Sector SCF launched a Eu1bn five year obligations foncières today (Wednesday) that is only the fourth French benchmark covered bond sold in six-and-a-half weeks, while yet another Italian is planning to tap the market and the UK’s Royal Bank of Scotland is lining up a 10 year Regulated Covered Bond.

Landesbank Hessen-Thüringen priced its first benchmark mortgage backed Pfandbrief yesterday (Tuesday) to build on a return to the international markets in April, and the issuer told The Cover that the deal was fuelled by the prospect of achieving pricing comparable to that available in its domestic market.

Moody’s assigned a Aa1 rating to mortgage backed covered bonds of Caja España yesterday (Tuesday), after rating the new entity Baa1, on stable outlook.

Standard & Poor’s is assessing how a restructuring of four covered bond programmes of HRE group resulting from a transfer of assets to wind-down entity FMS Wertmanagement will affect its analysis of the covered bonds.

Landesbank Hessen-Thüringen offered investors a rare opportunity to participate in a sizeable Pfandbrief transaction and gain exposure to its credit today (Tuesday), with a Eu750m four year issue duly snapped up by accounts in a market where jumbo Pfandbriefe have been few and far between.

Standard & Poor’s downgraded mortgage backed covered bonds issued by AIB Mortgage Bank from AAA to AA+, on negative outlook, yesterday (Monday), after cutting the bank’s parent on Friday.

Standard & Poor’s downgraded Allied Irish Banks from A- to BBB+, on negative outlook, on Friday, because of a deterioration in the bank’s reputation driven by an increase in the level of capital it is required to hold by its regulator and government imposed management changes.

The covered bond market is in good condition and generally open for issuance, syndicate bankers reported today (Monday), but with no new mandates publicly announced since last Thursday a deal from Italy’s Intesa Sanpaolo was this morning the most concrete new issue project in the pipeline for the week.

The European Central Bank has introduced a rule exempting non-Ucits covered bonds from provisions prohibiting a counterparty from submitting as collateral an asset that is issued or guaranteed by itself or by any other entity with which it has close links.

Standard & Poor’s on Friday affirmed at BBB the ratings of five rated members of Hypo Real Estate group following a transfer of assets to run-off entity FMS Wertmanagement. Fitch affirmed Deutsche Pfandbriefbank but cut those of Depfa Bank plc and subsidiaries Depfa ACS Bank and Hypo Public Finance Bank.