France

The book has been closed on Dexia Kommunalbank’s Eu1.5bn two year public sector Pfandbrief this morning, with pricing set to follow this afternoon. The deal maintained the Pfandbrief’s strong performance by avoiding pricing above mid-swaps on the back of a strong order book.

Compagnie de Financement Foncier got the second quarter off to a positive start yesterday (Tuesday), executing a $1bn two year Eurobond through Lehman Brothers. Despite being met with a degree of scepticism, the transaction was no April fool.

Caisse de Refinancement de l’Habitat only launched its first true jumbo six months ago, but this year has been the biggest issuer of benchmarks in the covered bond market. The Cover spoke to chairman and CEO Henry Raymond about the issuer’s new profile and strategy, and how the growing number of French covered bond issuers will affect their use of CRH.

With the primary market shut to new issues tap dancing looks set to come back into fashion. Dexia Municipal Agency and Münchener Hypothekenbank have led the revival over the last week, with both increasing outstanding public sector deals.

Société Générale is planning to issue its debut covered bond, a five year obligations foncières issue of up to Eu1.5bn backed by loans to the public sector, according to a report from Standard & Poor's.

The quest for an issuer to re-open the market continues, with Dexia Municipal Agency believed to have found limited enthusiasm for a new deal after pre-sounding in difficult conditions. Meanwhile, Italy’s Banca Popolare di Milano (BPM) has attempted to push itself to the front of the Italian bond queue following remarks by an official at the bank.

With the primary market shut again after ING wriggled through a brief opening last week, the covered bond market has been casting about for likely candidates to re-open it after the Easter holiday. The wide range of mandates outstanding — some of them from last year — is proving an obstacle to identifying the market’s white knight.

The spread between obligations foncières and other French covered bonds has underlined the power of legislation, and the UK hopes its own new framework will pay off. But recent developments suggest a more complicated picture. The Canadian regulator, for one, has yet to be won over, and structured issuance in Germany has finally emerged.

Canadian Imperial Bank of Commerce plans to roadshow a new covered bond programme early in the second quarter, following in the footsteps of not only those officially in the pipeline, but a variety of other issuers who have been visiting investors but adopting a lower profile.

With expectations of Spanish and UK supply for 2008 having been slashed, the market looks set to rely on three areas to support high supply forecasts for the year: France, Germany and new entrants. The Cover asked analysts whether the first two months of the year have led to any revisions to their estimates for the market in general and the two core jurisdictions in particular.

Caisse de Refinancement de L’Habitat (CRH) attracted a combined Eu2.8bn of orders across the two tranches of its new issue, although in common with other recent deals the short end proved more popular, with the issue only narrowly making it across the finish line at the long end.

The leads have opened the books on Caisse de Refinancement de L’Habitat’s new two tranche deal this morning at 5bp over mid-swaps for the three year tranche and 11bp over mid-swaps for the 10 year.