Germany

Dexia Kommunalbank is this (Wednesday) afternoon expected to launch the first 10 year covered bond since Caisse de Refinancement de l’Habitat at end of February, having mandated Deutsche Bank, Dresdner Kleinwort, DZ Bank and Landesbank Baden-Württemberg for the new issue.

SEB priced its Eu1bn five year public sector Pfandbrief yesterday (Wednesday) afternoon ahead of today’s continental European holidays. The deal maintained the Pfandbrief market’s “business as usual” attitude after the rescue of Düsseldorfer Hypothekenbank, although the issuer did move away from the retention system used in its last jumbo.

SEB AG nipped into the market this (Wednesday) morning before tomorrow’s continental European holidays to launch a Eu1bn two year public sector Pfandbrief. Some Eu1.25bn of orders had been placed by the time the books were closed late this morning.

Deutsche Apotheker und Ärztebank’s mortgage Pfandbriefe have been assigned a triple-A rating by Standard & Poor’s. The rating agency said today (Wednesday) that the first issue off apoBank’s Eu15bn debt issuance programme, of up to Eu1bn, is expected in mid-2008.

Berlin-Hannoversche Hypothekenbank (BHH) has priced the first Pfandbrief since Düsseldorfer Hypothekenbank (DHB) had to be transferred to the Association of German Banks’ (BdB) guarantee fund on Monday of last week. As such the deal was a vote of confidence in Germany’s product, but pricing issues still remain.

The books were this (Monday) morning opened on a Eu1bn two year public sector Pfandbrief for Berlin-Hannoversche Hypothekenbank, with the solid German investor base and short maturity helping the issuer to steal a march in a week that will be interrupted by public holidays. It is also the first new issue from Germany since Düsseldorfer Hypothekenbank (DHB) had to be transferred to the Association of German Banks (BdB) guarantee fund on Monday of last week.

Fitch yesterday (Tuesday) afternoon reacted to Monday’s transfer of Düsseldorfer Hypothekenbank to the Association of German Banks’ (BdB) guarantee fund by upgrading its long term rating from BBB- to A-. However, some German analysts said that DHB’s fall had already damaged the Pfandbrief’s image and reports of further writedowns at HVB ensured that the sector remained nervous.

Investors’ reactions to the performance of covered bonds in today’s turbulent markets was a topic of discussion at the IIR Securitisation 2008 conference in Amsterdam last Thursday. But while there was understanding of their sentiments, their greater comfort with a certain German name than top Spanish names was questioned.

The last covered bond stronghold against the financial crisis fell last night, when the Association of German Banks (BdB) took control of troubled lender Düsseldorfer Hypothekenbank. The BdB intends to sell the bank to a third party in the coming weeks. There has been an immediate fallout, with France’s Caisse de Refinancement de l’Habitat pulling back from its new issue.

Caisse de Refinancement de l’Habitat has pulled back from launching its new covered bond issue, blaming the events in the German market.

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.