Europe

Dexia Municipal Agency took advantage of its own and others’ redemptions to sell its third benchmark covered bond of the year yesterday (Tuesday), a Eu1bn five year obligations foncières issue.

Helaba will today (Wednesday) price its first jumbo Pfandbrief in six years, a Eu1bn seven year issue that, in the words of one syndicate official, met with a “complete stampede” for paper. Meanwhile, Ibercaja priced a Eu500m five year deal and Intesa Sanpaolo is expected to make its debut shortly.

Moody's will not give any economic value to non-EEA assets outside Switzerland, the US and Japan in German cover pools, but will continue to give full value to Swiss collateral backing Austrian and German covered bonds, the rating agency said yesterday (Tuesday).

DnB Nor Boligkreditt yesterday (Monday) sold the biggest five year benchmark of the year, while a Eu1bn 10 year BNP Paribas Home Loan issue attracted yield-oriented demand in a well supported covered bond market.

Dexia Municipal Agency built an order book in excess of Eu1.25bn for a five year obligations foncières issue this (Tuesday) morning, while demand for new Spanish supply was subdued. A German bank, meanwhile, is expected to firm up plans shortly that will make it the sixth issuer to tap the covered bond market this week.

Standard & Poor’s has affirmed at AAA the rating of covered bonds issued by Northern Rock (Asset Management) under its new rating methodology.

Three issuers this (Monday) morning launched or tapped benchmark covered bonds in a market buoyed by an agreement over the weekend on terms of an emergency loans package for Greece. Meanwhile, Dexia Municipal Agency has mandated for a deal that could be launched tomorrow (Tuesday).

Fitch downgraded Alpha Bank, EFG Eurobank Ergasias and National Bank of Greece from BBB to BBB- on Friday and put them on Rating Watch negative. The rating actions were among several that followed the Greek sovereign being cut to BBB-.

A Eu1bn five year issue for Compagnie de Financement Foncier yesterday (Thursday) wrapped up a busy two days of issuance in the benchmark covered bond market, with market participants positive about the prospects for next week’s activity. An Ibercaja mandate was yesterday added to a pipeline that includes names such as DnB Nor and Helaba.

With more than Eu4bn of benchmark issuance priced yesterday (Wednesday), there were no signs of the covered bond market slowing down after a record first quarter. And pricing at the tight end of guidance for three new benchmarks showed spreads holding up under the heavy supply.

Compagnie de Financement Foncier priced a Eu1bn five year covered bond this (Thursday) morning, while DnB Nor Boligkreditt has announced a mandate for a deal that market participants expect to be launched next week.

Spread guidance on new issues launched this (Wednesday) morning was wider than levels heard yesterday, but with re-offers ultimately fixed at the tight end of guidance, syndicate bankers were speaking of a good day for covered bonds. Meanwhile, Spanish supply emerged in the form of two taps.