France

Crédit Agricole is discussing a possible debut covered bond with investors this (Tuesday) morning. However, other issuers are said to have potentially been deterred from proceeding with jumbos by the deterioration in the market around the weekend.

Moody’s on Friday changed the outlook on BNP Paribas’ rating from stable to negative.

Erste Bank will this (Friday) afternoon price the first Austrian guaranteed bank deal, two days after agreeing a debt issuance programme with the country’s Finance Ministry. Meanwhile a new, unique government-backed name could emerge next week.

CIF Euromortgage followed up its Eu230m tap on Tuesday with a Eu310m increase to its Eu1.1bn 4% October 2016 obligations foncières yesterday (Wednesday) to satisfy demand for longer dated paper.

CIF Euromortgage is increasing its Eu1.03bn 4.5% December 2013 obligations foncières this (Tuesday) afternoon by Eu200m-Eu300m.

BNP Paribas wrapped up the first jumbo covered bond in four months yesterday (Thursday) afternoon, a Eu1.5bn five year at 110bp over mid-swaps. The deal affirmed the relevance of covered bonds in the post-crisis capital markets and bankers are hopeful that it will provide a cornerstone on which to build the asset class’s recovery.

BNP Paribas is today (Thursday) in the market with the first new jumbo covered bond since 8 September 2008, belying fears that the primary market could remain shut for as long as the first half of the year. While no flood of issuance is expected in the wake of the French bank’s deal, there is already talk of further supply next week.

Standard & Poor’s yesterday (Wednesday) downgraded Crédit Foncier de France (CFF) from A+ to A, and placed BNP Paribas on CreditWatch negative.

BNP Paribas this (Monday) morning launched the first public unguaranteed senior unsecured euro transaction since Lehman Brothers collapsed in mid-September. While bankers were pleased to see that unguaranteed funding for financial institutions is feasible, the deal did not convince everyone of the viability of jumbo covered bond issuance in the near future.

Crédit Mutuel Arkéa, the second largest regional group of France’s Crédit Mutuel Group, is today (Friday) signing a Eu10bn covered bond programme at the company’s headquarters in Brest.

The corporate bond market is booming, KfW has celebrated its 60th birthday with a bumper order book, and government guaranteed issuance is spreading. However, all this is happening at a price. And apart from the odd tap, the covered bond market can do no more than watch the new pricing landscape take shape.

The European bond market is bracing itself for a pick-up in guaranteed senior unsecured issuance from a wider range of jurisdictions as banks put the final touches to their new documentation and regulators release precise details of their respective guarantees.