Germany

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.

The European government-guaranteed market was relatively quiet this (Monday) morning, with IKB Deutsche Industriebank’s SoFFin-backed senior unsecured debut the only new issue. However, even that failed to generate the excitement of the first three German deals, with the overall market weaker.

Bayerische Landesbank and Danske Bank have priced their first government-backed senior unsecured issues on the back of larger order books and the next deals from Germany and Denmark are said to have been mandated for launch soon.

The German parliamentary Finance Committee is due to consult on the draft law on “the further development of Pfandbrief legislation” in Berlin next Wednesday. The planned amendment to the Pfandbrief Act includes new developments in several areas.

Danske Bank launched the first government-guaranteed deal for a Danish bank this (Wednesday) morning. Bayerische Landesbank opened books on a SoFFin-backed deal, while unguaranteed senior supply has reached new areas.

HRE has been granted an extension of its framework guarantee from the German financial markets stabilisation fund, SoFFin, the bank announced yesterday (Monday).

HSH Nordbank wrapped up its debut SoFFin-backed bond shortly before midday London time today (Tuesday).

HSH Nordbank today (Monday) opened books on a three year SoFFin-guaranteed benchmark deal at 0900 London time with guidance of 30bp over mid-swaps, which is where Commerzbank’s inaugural government-backed transaction was priced on Friday.

Fitch on Friday affirmed the ratings of two of Commerzbank’s covered bond-issuing subsidiaries, on stable outlook, but although Standard & Poor’s confirmed their ratings, it left them on negative outlook.

Commerzbank today (Friday) morning priced the largest government-backed bank deal, a Eu5bn three year issue that also opened SoFFin-guaranteed issuance.

Fitch yesterday (Thursday) placed Deutsche Pfandbriefbank AG’s public sector Pfandbriefe, rated AAA, on rating watch negative in light of the planned merger of Depfa in Germany into HRE Bank AG, and the rating watch negative on the latter’s public sector Pfandbriefe, which are also AAA rated.