Germany

Banco BPI opened books on its first covered bond this (Monday) morning, surprising many market participants who had expected the weak tone in the credit markets and summer holidays to dampen issuance. However, even more supply could emerge, with a public sector Pfandbrief being soft-sounded.

Fitch today (Wednesday) said that the draft amendment to the Pfandbrief Act has failed to adequately address the issue of liquidity gaps, which are the most important driver of differences in Discontinuity Factors (D-Factors) assigned by the rating agency to covered bond programmes.

Deutsche Bank may have come first in the all benchmarks ranking for the first half of 2008, but it was by no means the strongest across all markets. Here The Cover reveals the top banks in each of the biggest sectors and examines where the leading banks’ weaknesses lie.

In brief: S&P has downgraded by one notch the long term ratings of seven members of the Hypo Real Estate (HRE) group, citing writedowns in its structured credit portfolio and challenging business conditions. The triple-A ratings of all of the group’s various outstanding covered bonds were affirmed.

The draft amendment of the Pfandbrief Act has been released. The proposal is in line with expectations, including mainly technical changes, with the creation of a new class of aircraft Pfandbriefe being the only radical feature.

In brief: Standard & Poor’s yesterday (Monday) affirmed and withdrew its AAA rating of Berlin-Hannoversche Hypothekenbank’s public sector Pfandbriefe. The issuer requested the action because so that it is now rated by the same agencies as its majority owner, Landesbank Berlin.

The 12th Central European Covered Bond Conference took place last week, but while the event returned to Warsaw for the third time, it focused on several issues that have only recently come to the fore. The Cover discussed the highlights of the event with Otmar Stöcker, managing director of the Association of German Pfandbrief Banks, co-host of the conference with Poland’s Mortgage Credit Foundation, which initiated the conference series.

From EuroWeek's special Landesbank report: Philip Moore looks at how Landesbanks have adapted their funding strategies since the loss of state guarantees and reveals how they are coping with the credit crisis.

From EuroWeek's special Landesbank report: Perhaps more so than in any other European market, the aftermath of the subprime crisis exposed with brutal clarity many of the shortcomings of the German banking industry. Philip Moore investigates what the Landesbanks are doing to protect themselves and build for a stronger and more profitable future.

Deutsche Apotheker- und Ärztebank (apoBank) failed to reach its stated ambition yesterday (Tuesday), when it was forced to price a sub-benchmark sized deal despite targeting a jumbo debut. Market participants were split on whether this and other recent struggles have been caused by bad luck or bad advice.

In brief: Moody’s has upgraded the public sector Pfandbriefe of Bayerische Hypo- und Vereinsbank (HVB) from Aa1 to Aaa.