Germany

Bank of New Zealand is said to have met with investors in connection with a possible euro issue, thereby adding to a list of issuers that are roadshowing new programmes and/or preparing inaugural euro market issuance. The stage is set for a record number of debuts in any one month, but a bout of turmoil in the eurozone sovereign debt markets this week means that borrowers and investors will be taking a cautious approach to new business.

Finland’s Aktia Real Estate Mortgage Bank today (Thursday) launched a Eu500m three year issue that slotted into a slipstream created by an inaugural Nordea Bank Finland deal sold on Tuesday, while a Bank für Arbeit und Wirtschaft PSK mandate became the latest addition to a growing deal pipeline.

Euro benchmark covered bond supply slowed to a lone tap from Bayerische Landesbank today (Wednesday), although the pipeline of roadshows grew with the addition of a mandate from the UK’s Clydesdale Bank. Nordea Bank Finland yesterday priced a Eu2bn five year inaugural deal that appears to be the biggest Finnish benchmark covered bond ever.

Concrete plans for new issue projects next week appeared thin on the ground this (Friday) morning, but this could be a misleading indicator of forthcoming supply. At least three issuers are on the road next week, Spanish banks are emerging from blackout periods, and bankers said that French issuers are likely to be encouraged by a successful Compagnie de Financement Foncier Eu1bn 10 year transaction sold yesterday.

Fitch put public sector covered bonds issued by Depfa ACS Bank on negative review today (Wednesday) because of the potential impact of the issuer’s business restructuring.

Royal Bank of Scotland built the second biggest order book for a covered bond this year to price a Eu2bn 10 year deal yesterday (Thursday), which a syndicate banker at one of the leads said was a reward for the careful execution and strong performance of the issuer’s previous transactions. Dexia Kommunalbank Deutschland stuck to the short end of the curve to raise Eu1bn of funding via a three year public sector Pfandbrief.

Fitch upgraded Berlin-Hannoversche Hypothekenbank (Berlin Hyp) from A+ to AA-, on stable outlook, today (Thursday), because of Landesbank Berlin's acquisition of additional shares in Berlin Hyp and announcement that it will enter into a profit and loss transfer agreement with its subsidiary in the near future, subject to shareholder agreement.

Eurohypo is understood to have called off a three year dollar benchmark transaction it was preparing yesterday (Wednesday) after generating scant demand, with the deal’s documentation said to have been a key reason for this.

Investors flocked to a Eu2bn Royal Bank of Scotland covered bond today (Thursday), attracted by the opportunity to lock in a 4% coupon for 10 years, while a Eu1bn three year Dexia Kommunalbank Deutschland issue was also oversubscribed as primary market activity stepped up a gear following a Eu1bn deal from BNP Paribas Public Sector SCF yesterday.

BNP Paribas Public Sector SCF launched a Eu1bn five year obligations foncières today (Wednesday) that is only the fourth French benchmark covered bond sold in six-and-a-half weeks, while yet another Italian is planning to tap the market and the UK’s Royal Bank of Scotland is lining up a 10 year Regulated Covered Bond.

Landesbank Hessen-Thüringen priced its first benchmark mortgage backed Pfandbrief yesterday (Tuesday) to build on a return to the international markets in April, and the issuer told The Cover that the deal was fuelled by the prospect of achieving pricing comparable to that available in its domestic market.

Standard & Poor’s is assessing how a restructuring of four covered bond programmes of HRE group resulting from a transfer of assets to wind-down entity FMS Wertmanagement will affect its analysis of the covered bonds.