Germany

Moody’s this (Tuesday) morning cut the rating of Skandinaviska Enskilda Banken AB from Aa2 to A1 and that of its German subsidiary, SEB AG, from A1 to Baa1, and left them both on negative outlook.

Standard & Poor’s yesterday (Wednesday) put six members of the Hypo Real Estate group on CreditWatch positive after the German Financial Markets Stabilisation Fund (SoFFin) took a 8.7% stake in the group as a first step to taking control of and recapitalising it. The rating agency said that an upgrade of up to three notches is possible.

The law amending the Pfandbrief Act has come into effect today (Thursday), after it was published in the Bundesgesetzblatt, the official law gazette, yesterday (Wednesday).

Fitch today (Monday) affirmed DZ Bank’s covered bonds at AAA, after the bank took action to compensate for its increased exposure to the German cooperative banking sector.

Eurohypo on Tuesday afternoon priced its first jumbo of the year, a Eu1.25bn five year mortgage Pfandbrief, at 100bp over mid-swaps, the tight end of 100bp-110bp over initial guidance. The issue marked the successful implementation of a three-pronged funding strategy for the Commerzbank group.

Aareal’s debut SoFFin-backed issue has been the highlight of government-guaranteed supply this week, while BNP Paribas is today (Wednesday) adding momentum to a reopening of the unguaranteed senior bank market.

Eurohypo is expected to price a jumbo five year mortgage Pfandbrief later today (Tuesday), after having had to negotiate a tricky price discovery process.

Eurohypo is soft-sounding a potential five year mortgage Pfandbrief today (Monday), with books expected to be opened either later today or tomorrow morning. Any deal would be the first jumbo covered bond since early February.

Bankers are hopeful that the jumbo covered bond market could be reopened next week, saying that several issuers are potential candidates, but that one in particular is most likely to test the market.

In brief: Deutsche Bank is laying the groundwork for Pfandbrief issuance backed by mortgages.

Moody’s downgraded Deutsche Postbank from Aa2 to Aa3 yesterday (Wednesday) and kept the bank on review for further downgrade.

IKB Deutsche Industriebank issued a Eu2bn three year government-guaranteed bond at 45bp over mid-swaps today (Thursday). The pricing took into account IKB's troubles and the anomalies of the secondary market.