France

Issuers are limbering up to launch the first benchmark covered bonds of 2010, with three institutions having mandated for transactions that could hit the market this week and others busy with preparations.

Moody’s is investigating whether a draft law being discussed by France’s parliament that provides for a 50% withholding tax on certain interest payments could adversely affect some covered bond programmes, the rating agency said yesterday (Thursday).

Christine Lagarde, French minister for the economy, industry and employment, today (Wednesday) presented a draft law to the council of ministers that would accommodate French covered bonds issued outside the country’s obligations foncières framework.

Caisse de Refinancement de l’Habitat today (Thursday) increased an April 2019 benchmark covered bond by Eu105m through Landesbank Baden-Württemberg, taking advantage of good investor interest for 10 year paper.

CIF Euromortgage yesterday (Thursday) priced a Eu1.25bn April 2012 obligations foncières issue at 10bp over mid-swaps, matching Compagnie de Financement Foncier in achieving the tightest level for a benchmark covered bond this year. Meanwhile, Caja Murcia’s issuance plans are understood to be on hold.

CIF Euromortgage is set to price an April 2012 benchmark at the tight end of guidance this (Thursday) afternoon after having built a book of around Eu1.5bn for the new issue.

Caisse de Refinancement de l’Habitat is today (Monday) increasing a 5% October 2013 issue by Eu410m at a level described as “aggressive” by a syndicate official on the deal. Meanwhile, Banco Espírito Santo is expected to hit the market before mid-week holidays in the US and France.

Compagnie de Financement Foncier was able to increase the size of a long two year deal yesterday (Wednesday) afternoon and price it at the tight end of guidance, despite coming at the tightest level for a covered bond benchmark this year. Meanwhile, CRH is tapping a long dated deal in the wake of Dexia Municipal Agency earlier this week.

Compagnie de Financement Foncier has closed books on a Eu1.5bn long two year deal, which will be the shortest dated and tightest benchmark covered bond to be priced this year. Meanwhile, Corealcredit will shortly close books on a four year mortgage Pfandbrief, and levels wider than where a Bankinter benchmark was priced yesterday (Tuesday) are being whispered for a forthcoming Caja Madrid cédulas issue.

Dexia Municipal Agency is today (Tuesday) increasing its September 2016 obligations foncières by Eu750m at a level 5bp inside the re-offer spread on the initial issue.

Moody’s yesterday (Thursday) placed on review for possible downgrade the bank financial strength rating and long term issuer rating of BNP Paribas.

CIF Euromortgage priced the tightest 10 year benchmark of the year yesterday (Tuesday) afternoon, a Eu1.25bn obligations foncières deal that the issuer told The Cover highlighted the attractiveness of covered bonds versus government guaranteed funding.