Germany

Skandinaviska Enskilda Banken has avoided being knocked off course by adverse headlines and has priced a new Eu1bn five year benchmark covered bond at 17bp over mid-swaps this morning.

Eurohypo has mandated Commerzbank, Deutsche Bank, Dresdner Kleinwort and Morgan Stanley for a five year public sector Pfandbrief issue, its first jumbo this year, but the timing of the deal is unclear. When the deal does emerge, it could take public sector Pfandbriefe into new territory.

WestLB is planning to hit the road over the coming weeks for a new public sector jumbo Pfandbrief, with its lead managers crossing their fingers that the market avoids being derailed by a surge in supply before the bond comes to market.

Moody’s cut Alliance & Leicester’s long term credit rating from Aa3 to A1 yesterday (Wednesday), just days after the UK bank launched and retained the first issue from its covered bond programme. Meanwhile, Düsseldorfer Hypothekenbank has laid out its position in light of Fitch’s rating action last Friday.

Hypo Real Estate International’s Eu1bn two year mortgage Pfandbrief earlier this week showed the new realities facing German issuers today, but the issuer yesterday (Wednesday) told The Cover that it was not unduly concerned about the situation. Meanwhile, the HRE group is being courted by a JC Flowers-led consortium.

Hypo Real Estate International (HRE) priced a Eu1bn two year Hypothekenpfandbrief yesterday (Tuesday) afternoon at 9bp over mid-swaps on the back of a book dominated by domestic accounts, taking the first steps to locating the new space occupied by German mortgage backed deals.

Price guidance touching the double-digits over mid-swaps for Hypo Real Estate International’s two year mortgage Pfandbrief this morning showed that even German credits cannot escape the new demands being placed on covered bond issuers today.

Bayerische Landesbank achieved one of the highest international distribution numbers for a jumbo Pfandbrief since last summer, placing around two-thirds of its Eu1.5bn long three year public sector backed deal outside Germany when the issue was priced on Friday.

BayernLB is expected to price a new three and a half year benchmark sized public sector Pfandbrief today, after opening books yesterday (Thursday) after the European Central Bank's decision to hold rates stable. The leads were able to increase the size of the deal after books were left open overnight for orders from Asia.

The Dexia group on Wednesday demonstrated the diversity of funding options it enjoys, adding a jumbo Pfandbrief to its issuance this year. The Eu1.5bn two year issue nevertheless showed the limits of what issuers can achieve in today's market. (Updated to include quotes)

The Dexia group yesterday (Wednesday) demonstrated the diversity of funding options it enjoys, adding a jumbo Pfandbrief to its issuance this year. The Eu1.5bn two year issue nevertheless showed the limits of what banks can achieve in today’s market.

The book has been closed on Dexia Kommunalbank’s Eu1.5bn two year public sector Pfandbrief this morning, with pricing set to follow this afternoon. The deal maintained the Pfandbrief’s strong performance by avoiding pricing above mid-swaps on the back of a strong order book.