Germany

Westfälische Landschaft Bodenkreditbank yesterday (Wednesday) seized on a favourable issuance window to make one of its rare appearances on the jumbo covered bond market. The issuer was rewarded with what appears to be the biggest order book for a Pfandbrief benchmark so far this year in spite of punchy pricing.

Despite considering a new issue, La Caixa looks unlikely to follow-up on Monday’s reopening of the Spanish market by Santander, but a French issuer is instead said to be due to launch a benchmark deal today (Wednesday).

WestLB said yesterday (Tuesday) that it will sell Westdeutsche ImmobilienBank as part of a plan to halve its asset base and restructure its ownership in exchange for European Commission approval of its state aid.

Standard & Poor’s yesterday (Tuesday) downgraded Eurohypo’s rating from A to A-, on negative outlook.

Westfälische Landschaft Bodenkreditbank is due to price the first jumbo Pfandbrief since mid-March today (Wednesday) at a level much tighter than the last benchmark public sector Pfandbrief. But bankers and investors warned that other issuers are unlikely to be able to repeat this feat.

Fitch on Friday took rating actions on five subsidiaries of Commerzbank, including Eurohypo and its Luxembourg subsidiary, following the European Commission’s conditional approval of Germany’s state aid for Commerzbank.

HSH Nordbank’s Schiffspfandbriefe have been downgraded by Moody’s from Aaa to Aa3, but the rating agency affirmed the Aaa rating of the bank’s public sector covered bonds. It also lowered the Timely Payment Indicator of the Schiffspfandbriefe.

Standard & Poor’s yesterday (Wednesday) downgraded five German Landesbanks by one to two notches, and revised the outlook on a sixth. Two of the Landesbanks in question hit back at the rating agency’s actions.

A commitment to spin off Eurohypo is expected to be a condition of the European Commission's approval of the German government's bailout of Commerzbank, but covered bond analysts have questioned whether the leading covered bond issuer is likely to attract a takeover bid or be able to go it alone.

Moody’s yesterday (Thursday) cut HSH Nordbank’s rating from A1 to A2, on stable outlook, because it expects ongoing core credit losses for the German bank and pressure on its capital.

Münchener Hypothekenbank today (Thursday) became the fifth institution to tap outstanding issuance this month, with flows in jumbo covered bonds proving encouraging, and another tap is said to be underway.

The recent trend of covered bond issuers tapping outstanding jumbos continued today (Tuesday), while one French name is said to have this week tested investor sentiment for a new issue.