France

Concrete plans for new issue projects next week appeared thin on the ground this (Friday) morning, but this could be a misleading indicator of forthcoming supply. At least three issuers are on the road next week, Spanish banks are emerging from blackout periods, and bankers said that French issuers are likely to be encouraged by a successful Compagnie de Financement Foncier Eu1bn 10 year transaction sold yesterday.

Compagnie de Financement Foncier took advantage of an increase in yields to launch a Eu1bn 10 year obligations foncières issue today (Thursday), its third and longest dated Eu1bn or greater deal of the year.

Axa Bank Europe SCF inaugurated a Eu5bn obligations foncières programme on Friday with a Eu750m 10 year deal that an official at the issuer told The Cover represented “a big success”. He also discussed the choice of the French instrument and the use of RMBS as collateral.

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.

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.

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.

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.

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.

The first obligations foncières issued by Axa Bank Europe SCF will be backed by a Eu1.5bn senior tranche of an RMBS of Belgian residential mortgages originated by its parent, Brussels-based Axa Bank Europe. Bankers at arranger BNP Paribas said that this provided the European retail banking arm of French insurance group Axa with a sensible way of issuing in the absence of Belgian covered bond legislation.