Europe

BNP Paribas priced the biggest benchmark covered bond since the middle of April yesterday (Wednesday) to wrap up the busiest day in the market since then, with Sparebanken Vest and Dexia Kommunalbank Deutschland also taking half a yard each out of the market.

Caja Madrid yesterday (Wednesday) became only the second issuer to have its covered bonds upgraded by Standard & Poor’s upon implementation of the rating agency’s new methodology. This means that all cédulas, either single or multi-issuer, rated by S&P are now AAA.

Standard & Poor’s has affirmed at AAA the public sector-backed covered bonds issued by Dexia LdG Banque and Eurohypo Luxembourg, but assigned a negative outlook to the latter’s because their rating would automatically be cut in the event of an issuer downgrade.

Crédit Mutuel Arkéa yesterday (Tuesday) achieved a targeted size of Eu1bn for its inaugural public covered bond despite facing deteriorating market conditions during the deal’s execution.

Following the departure of Florian Eichert for Credit Suisse, Landesbank Baden-Württemberg has detailed how its credit research team will be handling covered bonds.

Three issuers launched euro covered bonds this (Wednesday) morning ahead of a public holiday in many parts of Germany tomorrow, with market conditions said to be better than yesterday, although still weak. Meanwhile, the US market could see its first new covered bond supply since mid-April.

Fitch downgraded three Spanish financial institutions yesterday (Tuesday) afternoon, while Standard & Poor’s put Caja Madrid on CreditWatch negative.

France’s Credit Mutuel Arkéa this (Tuesday) morning launched an inaugural public covered bond, marketing a Eu500m minimum issue at a spread wider than some had anticipated in a difficult market.

Standard & Poor’s has revised the outlook on SNS Bank from stable to negative because it expects the Dutch group to continue to be pressured on bank earnings and asset quality.

Fitch downgraded Banco de Sabadell’s rating from A+ to A, with a stable outlook, today (Tuesday) because of a deterioration in the bank’s asset quality and Spain’s weak economic environment.

Moody’s and Fitch yesterday (Wednesday) said that the takeover of CajaSur by the Spanish authorities has not affected the ratings of either covered bonds issued directly by the savings bank or those it participates in.

GCE Covered Bonds will price the first covered bond of Eu1bn or more in five weeks this (Thursday) afternoon, a four year issue at 40bp over mid-swaps that one banker described as “a first glimmer of hope”.