France

Compagnie de Financement Foncier yesterday (Wednesday) reopened a March 2013 Swiss franc deal for the third time, and attracted broad support for the tap.

German accounts have been exerting a greater influence on the jumbo covered bond market this week, even if French issuers continued to be the main players and supply remained confined to taps.

Taps are the order of the week in the covered bond market, with at least four expected to have been completed by tomorrow (Friday).

Two obligations foncières issuers yesterday (Thursday) tapped outstanding deals, while a third French institution this week placed covered bonds with dollar investors.

Münchener Hypothekenbank today (Thursday) became the fifth institution to tap outstanding issuance this month, with flows in jumbo covered bonds proving encouraging, and another tap is said to be underway.

The recent trend of covered bond issuers tapping outstanding jumbos continued today (Tuesday), while one French name is said to have this week tested investor sentiment for a new issue.

Fitch on Friday affirmed the AAA rating of Dexia Municipal Agency's obligations foncières despite a downgrade of its parent, Dexia Crédit Local, from AA- to A+.

Compagnie de Financement Foncier tapped a Sfr500m March 2013 deal for Sfr250m at plus 90bp via Basler Kantonalbank and Zürcher Kantonalbank on Wednesday, taking the issue to Sfr750m (Eu496m).

Better than expected first-quarter bank results and unguaranteed bond supply from lower rated financial institutions gave market participants in Europe and the US hope that the market is on the road to recovery this week.

Société Générale SCF is increasing its recent Eu1.25bn 10 year public sector obligations foncières issue by Eu1bn after encountering strong real money demand for the tap. Meanwhile a rare, if modest and privately placed, dollar issue was executed yesterday (Wednesday).

Fitch last week took rating actions on several major banks following a review of the capacity of high grade sovereigns to support their largest and most systemically important commercial banks. The agency upgraded two German Pfandbrief issuers, but cut the ratings of four entities in the Dexia group.

Caisse de Refinancement de l’Habitat increased the Eu1bn 10 year issue it launched in late March by more than expected yesterday (Wednesday) afternoon to accommodate demand from end investors.