France

Eurohypo is today (Wednesday) sizeing a four year Pfandbrief at Eu500m, the lower end of a targeted size range, in response to muted demand in a market where Eu4.25bn of supply has hit the market in a day-and-a-half.

Fitch has downgraded BNP Paribas from AA to AA-, on stable outlook, because the bank “no longer fits comfortably alongside a peer group of more highly rated banks”.

Banca Monte dei Paschi di Siena is taking the place of UBI Banca in reopening the Italian covered bond market, launching its inaugural deal today (Tuesday), but the reopening of the obbligazioni bancarie garantite segment has been badly managed, according to bankers. Meanwhile, four other issues are accessing the market today.

Compagnie de Financement Foncier stood out from the crowd with a Eu600m 15 year obligations foncières issue yesterday (Tuesday), which the issuer told The Cover underlined its profile in the long end of the curve. Meanwhile, Crédit Agricole got a Eu1bn five year deal away amid a torrent of shorter dated supply.

New covered bonds launched by Danske Bank, Lloyds TSB and SpareBank 1 Boligkreditt met with modest demand today (Wednesday), although syndicate bankers highlighted high quality order books and sub-Eu1bn issue sizes in longer maturities as respectable achievements.

Five new Eu500m plus covered bonds were announced in the past 24 hours after yesterday (Monday) morning’s two, despite market conditions proving worse than last week, when 12 hit the market. The deals announced today (Tuesday) are set to take euro jumbo issuance this year past Eu100bn.

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.

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.

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.

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.