Europe

Issuers pricing transactions yesterday (Tuesday) adopted flexible approaches to timing and execution, and representatives of CIF Euromortgage and Eurohypo told The Cover that they were happy with the end results in light of market conditions.

Moody’s affirmed the Aa2 rating of Achmea Hypotheekbank’s mortgage covered bonds yesterday (Tuesday) after the Dutch issuer restructured some aspects of its programme.

Royal Bank of Scotland launched its first benchmark covered bond this (Wednesday) morning, a Eu1.25bn three year issue that market participants said had succeeded despite coming in a tough market and as the number of Eu500m or greater deals this week hit 10, totalling Eu9.2bn. Meanwhile, Aareal Bank and WL Bank added to the growing supply of sub-Eu1bn issues.

Standard & Poor’s has affirmed at AAA mortgage covered bonds issued by Eurohypo and Barclays’ Spanish arm under its new rating criteria, and assigned the ratings a stable outlook.

A 3.5% coupon attracted real money investors to a 10 year Caisse de Refinancement de l’Habitat issue yesterday (Monday), enabling the issuer to sell the equal largest covered bond in that maturity this year.

The hectic pace of issuance in the covered bond market was maintained today (Tuesday), with three new deals following four yesterday, but issuers had to make do with smaller sizes and wider spreads.

Münchener Hypothekenbank achieved easily the tightest spread of four issues yesterday (Monday), selling a Eu1.25bn five year mortgage Pfandbrief at 8bp over mid-swaps, following guidance of the 9bp area.

A Eu1bn five year issue from OP Mortgage Bank was the most popular covered bond on offer yesterday (Monday), attracting Eu2bn of orders in less than half an hour.

Confident of investors’ appreciation of changes it has made to improve its credit profile, Swedbank Mortgage yesterday (Monday) at short notice launched a five year benchmark transaction without any deal-specific preparation, the issuer told The Cover.

Caixa Geral de Depósitos has become the fourth issuer to cancel a covered bond ratings contract with Standard & Poor’s since the rating agency finalised a new methodology in December. S&P on Friday withdrew the ratings of the Portuguese bank’s mortgage covered bonds after affirming them at AAA and assigning a negative outlook.

The covered bond market had one of its busiest ever sessions this (Monday) morning, with four institutions making the most of an issuance window despite overall sentiment remaining fragile.

The primary covered bond market is expected to be very busy next week, with mandates for Münchener Hypothekenbank and OP Mortgage Bank announced this (Friday) morning said to be only the first of many due to emerge in the coming days. Meanwhile, France’s CM-CIC snuck out a deal today between a German public holiday yesterday and US non-farm payrolls today.