Germany

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.

Jan Bettink has taken over from Henning Rasche as president of the Association of German Pfandbrief Banks (vdp) following his election at the association’s members meeting in Berlin yesterday (Thursday). Meanwhile, a familiar face is returning among four new board members.

At least two banks have mandated for covered bonds that are expected next week, after supply this week of Eu10.7bn.

Covered bond issuance of Eu500m or greater deals this week is set to top Eu10bn today (Thursday), with SEB having launched the 12th such issue. Meanwhile, WestImmo launched the third Eu500m Pfandbrief of the week this morning.

Issuers pricing transactions yesterday (Tuesday) adopted flexible approaches to timing and execution, and representatives of CIF Euromortgage and Eurohypo told The Cover that they were happy with the end results in light of market conditions.

Royal Bank of Scotland launched its first benchmark covered bond this (Wednesday) morning, a Eu1.25bn three year issue that market participants said had succeeded despite coming in a tough market and as the number of Eu500m or greater deals this week hit 10, totalling Eu9.2bn. Meanwhile, Aareal Bank and WL Bank added to the growing supply of sub-Eu1bn issues.

Standard & Poor’s has affirmed at AAA mortgage covered bonds issued by Eurohypo and Barclays’ Spanish arm under its new rating criteria, and assigned the ratings a stable outlook.

The hectic pace of issuance in the covered bond market was maintained today (Tuesday), with three new deals following four yesterday, but issuers had to make do with smaller sizes and wider spreads.

Münchener Hypothekenbank achieved easily the tightest spread of four issues yesterday (Monday), selling a Eu1.25bn five year mortgage Pfandbrief at 8bp over mid-swaps, following guidance of the 9bp area.

The covered bond market had one of its busiest ever sessions this (Monday) morning, with four institutions making the most of an issuance window despite overall sentiment remaining fragile.