France

A trio of new obligations foncières issuers arriving in 2008 and 2009 after a 6-1/2 year hiatus showed that the instrument had retained its relevance, and could even challenge its structured counterpart for innovation.

Buoyed by the arrival of a third name and flattered by comparisons with their German counterparts, the early obligations foncières issuers took full advantage of the strength of the new product to go out on the road in search of new investors.

Covered bonds made a comeback in the Swiss franc market this week, as investors reached for a highly rated asset class that, unlike other triple-A product, still offers a spread above mid-swaps.

A series of new issues at aggressive levels in what could be the busiest ever week in the covered bond market has raised fears among investors that the asset class is facing a bubble.

Caisse de Refinancement de l’Habitat this (Friday) morning reopened its 5% April 2019 benchmark. Leads Landesbank Baden-Württemberg, Natixis and Société Générale priced a Eu750m increase at 45bp over mid-swaps.

Dexia Municipal Agency yesterday (Monday) priced its third obligations foncières jumbo of the year, and the fourth covered bond benchmark for the Dexia group. But a rapid bookbuilding process for the Eu1bn seven year issue showed that investors’ credit lines were still open for further supply from Dexia MA, the issuer told The Cover.

Dexia Municipal Agency today (Monday) launched the first new French benchmark since 16 July, a Eu1bn seven year public sector obligations foncières issue that is due to be priced at the tight end of guidance.

Deutsche Postbank is today (Thursday) increasing its 3.125% July 2014 debut public sector Pfandbrief issue by Eu500m at a much tighter level than where the original issue was priced on 3 July. And Caisse de Refinancement de l’Habitat is the latest French issuer to join the recent tapping activity.

Compagnie de Financement Foncier launched the first publicly placed 10 year covered bond in Swiss francs for a non-domestic issuer in more than a year on Thursday.

Compagnie de Financement Foncier has begun putting in place the necessary documentation to establish a 144A MTN programme to sell its covered bonds into the US, and is hoping to overcome potential obstacles to its application. Meanwhile, the French issuer yesterday (Thursday) tapped a Swiss franc bond.

In brief: Société Générale SCF yesterday (Thursday) increased its Eu1bn 4% July 2016 obligations foncières by Eu250m.

Compagnie de Financement Foncier today (Wednesday) increased its October 2012 obligations foncières by Eu800m.