Germany

Landesbank Baden-Württemberg is launching the first Eurodollar benchmark covered bond in more than two-and-a-half years, targeting a three year public sector-backed issue of at least $500m (Eu397m), with European and Asian accounts the main audience.

Fitch on Friday downgraded Düsseldorfer Hypothekenbank from A- to BBB- because of a change of ownership, from Bundesverband deutscher Banken to US-based investment firm Lone Star. However, as a Pfandbrief issuer, the bank should benefit from strong systemic support, the rating agency said.

HSH Nordbank yesterday (Monday) priced a Eu500m three year Pfandbrief issue that could well be the last sizeable new issue bought by euro-zone central banks operating under the European Central Bank’s purchase programme, which today (Tuesday) appeared to have passed its targeted Eu60bn. [Amended.]

HSH Nordbank will shortly close books on a Eu500m three year public sector-backed Pfandbrief that was the only sizeable new covered bond in the market this (Monday) morning, with the end of the European Central Bank’s purchase programme injecting some uncertainty into the market.

Eurohypo yesterday (Wednesday) priced a Eu500m four year mortgage-backed Pfandbrief, the fourth sub-Eu1bn deal of six sizeable issues launched this week. Meanwhile, HSH Nordbank plans to access the benchmark covered bond market.

Eurohypo is today (Wednesday) sizeing a four year Pfandbrief at Eu500m, the lower end of a targeted size range, in response to muted demand in a market where Eu4.25bn of supply has hit the market in a day-and-a-half.

Fitch yesterday (Monday) affirmed at AA- and removed from negative review mortgage-backed Pfandbriefe issued by Corealcredit, one of eight issuers whose mortgage covered bonds were placed on Rating Watch negative in January because of concerns over credit risk posed by their commercial real estate exposure and limited information on collateral.

Banca Monte dei Paschi di Siena is taking the place of UBI Banca in reopening the Italian covered bond market, launching its inaugural deal today (Tuesday), but the reopening of the obbligazioni bancarie garantite segment has been badly managed, according to bankers. Meanwhile, four other issues are accessing the market today.

Four covered bond issuers were this (Monday) morning said to be lining up to tap the covered bond market, with the level being floated for a mooted Italian transaction surprising market participants.

Düsseldorfer Hypothekenbank’s public sector Pfandbriefe were today (Wednesday) downgraded from AAA to AA-, on negative outlook, by Standard & Poor’s, which then withdrew the rating at the issuer’s request.

Landesbank Baden-Württemberg yesterday (Monday) pursued its strategy of launching at least one benchmark covered bond a year, raising Eu1bn of funding at a cost that was comparable with spreads achievable via private placements, the issuer told The Cover.

ABN Amro Bank and Landesbank Baden-Württemberg this (Monday) morning followed through with new covered bonds announced last Friday, with a 10 year deal for the former representing the first Dutch benchmark since March.