France

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.

Société Générale increased Caisse de Refinancement de l’Habitat’s 4% April 2018 issue by Eu150m this (Friday) morning in a rare glimpse of real money-driven supply in the covered bond market. JP Morgan also privately placed two deals for Bancaja earlier this week.

In brief: Leeds Building Society has executed what is believed to be its first covered bond, while French issuers have been tapping some outstanding issues.

In brief: ING and Crédit Mutuel group members were downgraded this week, but the only covered bonds to have been cut so far this week have been those of Ukraine’s Bank Khreschatyk.

Banque AIG on Friday breached a Moody’s rating trigger in its role as liquidity facility provider for Cédulas TDA 5, FTA. However, the cédulas ratings have so far remained untouched by the breach.

Moody’s yesterday (Wednesday) placed on review for possible downgrade the Aaa rating assigned to Dexia Municipal Agency’s obligations foncières. The move may seem like old news since Dexia’s other liabilities were today given an effective guarantee by the French, Belgian and Luxembourg governments, but it triggered confusion and surprise among analysts.

Moody’s on Friday put the Aaa ratings of Dexia Sabadell’s cédulas territoriales on review for possible downgrade after cutting the bank’s long term rating from Aa2 to A2 and putting this on review for possible downgrade.