Germany

Rating action: Moody’s yesterday (Tuesday) put HSH Nordbank’s Schiffspfandbriefe on review for downgrade as a result of the downgrade of the bank’s senior rating from Aa2 to Aa3 last week.

Rating action: Moody’s has downgraded HSH Nordbank from Aa2 to Aa3, on stable outlook, because of a cut in its bank financial strength rating resulting from an increased risk profile and stretched financial profile.

Anyone worried about deteriorating asset quality and the state of European mortgage markets would have felt their spirits lifting during the opening panel of the European Mortgage Federation’s sixth annual conference in Brussels yesterday (Thursday). Representatives from Denmark, Poland, the Netherlands, Germany and Belgium painted a reassuring picture of the state of their country’s mortgage markets.

SoFFin, the German Financial Markets Stabilisation Fund, has blasted the Landesbanks for being too slow in recapitalising themselves and dismissed claims that it is being too slow in providing banks with help.

The corporate bond market is booming, KfW has celebrated its 60th birthday with a bumper order book, and government guaranteed issuance is spreading. However, all this is happening at a price. And apart from the odd tap, the covered bond market can do no more than watch the new pricing landscape take shape.

The Association of German Pfandbrief Banks (vdp) has relaxed the minimum standards for increases to jumbo Pfandbriefe to make it easier for issuers and dealers to offer paper in the illiquid market conditions. Some bankers were sceptical that the move would provoke much supply, but one was hopeful that it might presage a broader discussion about minimum jumbo standards.

Henning Rasche is leaving Eurohypo, where he was a member of the board of managing directors. He will, however, remain president of the Association of German Pfandbrief Banks (vdp).

Germany’s once staid banking system reinvented itself during the boom years, but the credit crisis has revealed some unpleasant truths. Chris Dammers asks how the sector will make its way out of the current mess. From EuroWeek’s Germany in the Capital Markets supplement.

Although the government guaranteed bank bond sector is maturing in the UK, the impact of broader issuance on the rest of the fixed income market has yet to fully play out, with the sovereign, supranational and agency sector throwing up new pricing surprises and some countries just beginning to gear up for issuance. Another shocking level appeared on screens only this (Monday) morning.

The mighty Pfandbrief has finally fallen victim to the problems suffered by other asset classes in the international capital markets. With volatile spreads, a lack of liquidity and worries over the futures of some issuers, the situation looks bleak. Nonetheless, Brendan Daly finds that this has not dented the confidence and optimism of market participants. From EuroWeek’s Germany in the Capital Markets supplement.

DVB Bank, which specialises in international transport finance, is working on a ship Pfandbrief programme. The bank will also be looking at how the new asset class of Flugzeugpfandbriefe develops.

NIBC Bank has completed the transfer of German residential loans to its cover pool, which led Fitch to affirm the Dutch bank’s covered bonds at AAA today (Wednesday). [Story corrected to reflect completion of transfer.]