Germany

All operating members of Hypo Real Estate Group were yesterday (Monday) downgraded by Moody’s, and the outlook on their ratings changed to negative.

Fitch has updated its model for rating Dutch residential mortgage-backed transactions, and proposed changes to its methodology for German residential mortgage-backed transactions that assume sharper falls in value in the event of a forced sale.

Fitch on Friday affirmed Wüstenrot Bank’s four outstanding public sector Pfandbriefe at AAA and removed them from negative review.

Real money demand and a strong domestic bid coupled with healthy participation from foreign investors contributed to a successful move into the unguaranteed senior debt market by Commerzbank on Friday.

As of today (Monday) the Association of German Pfandbrief Banks is publishing separate yield curves for mortgage and public sector covered bonds.

Commerzbank will today (Friday) price the first unguaranteed senior unsecured bond from a German issuer since the collapse of Lehman Brothers.

Proposed amendments to the Pfandbrief Act were met with approval during a hearing on the draft law on “the further development of Pfandbrief legislation” last Wednesday.

The German government is understood to have agreed to take a majority stake in Hypo Real Estate of 50% plus one share. The move underlines the government’s commitment to the Pfandbrief, and should help reinforce it, too, said covered bond analysts.

Moody’s yesterday (Thursday) concluded a review for possible upgrade of Eurohypo’s ratings by leaving its long term debt rating unchanged, at A1.

Norddeutsche Landesbank is planning to issue a guaranteed benchmark issue via Dresdner Kleinwort, DZ Bank, HSBC, Nomura and NordLB under a guarantee scheme that is backed by not the German Financial Markets Stabilisation Fund, SoFFin, but its owners, Lower Saxony and Saxony-Anhalt.

Yesterday (Wednesday) Bayerische Landesbank printed what is believed to be the first publicly sold Pfandbrief issue since Lehman Brothers collapsed. The Sfr150m (Eu100m) three year public sector backed deal also marks a return to publicly sold foreign currency issuance for covered bonds in general.

Landesbank Baden-Württemberg yesterday (Monday) resumed its recently-introduced weekly auctions of Pfandbriefe after a break over the holiday season. The results highlighted the difference in valuations of Pfandbriefe between domestic and international accounts.