Germany

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.

Commerzbank today (Thursday) opened the long-awaited SoFFin-guaranteed senior unsecured bank market, paving the way for other German lenders to tap the market with this new asset class.

HSH Nordbank looks set to be the first German bank to launch a SoFFin-backed issue after the German financial markets stabilisation fund apparently gave the bank the go-ahead to launch its deal. Meanwhile there is even the first hint of jumbo covered bond supply.

Landesbank Baden-Württemberg is attempting to overcome some of the hurdles in selling covered bonds in the primary market by auctioning Pfandbriefe on a weekly basis to institutional investors and banks. It has suggested that the procedure might be taken up by other issuers.

Senior unsecured bank issuance guaranteed by the German financial markets stabilisation fund, SoFFin, looks set to be one of the early focuses of the market this year, with three deals said to be nearing launch.

Fitch has put Wüstenrot Bank AG Pfandbriefbank’s public sector Pfandbriefe on rating watch negative on concerns that the issuer may not have sufficient liquidity in its public sector cover pool to repay the respective Pfandbriefe maturing in January unless the issuer takes remedial action, the rating agency said in December.

Bayerische Landesbank has set up a Eu15bn SoFFin-guaranteed debt issuance programme. The Landesbank is expected to be one of the first to issue guaranteed bank debt out of Germany in the new year.

HSH Nordbank will not be launching its planned SoFFin guaranteed bond issue until next year, and bankers are now considering whether it will even be the first German bank to tap the government guaranteed market.

Caixa Geral de Depósitos and LeasePlan are pricing the first government guaranteed deals from Portugal and the Netherlands, respectively, this (Friday) afternoon. However, the first guaranteed deal from Germany, for HSH Nordbank, is not expected to be rushed to market.