Germany

HSH Nordbank has priced the first jumbo shipping Pfandbrief flat against mid-swaps, at the tight end of guidance. The two year deal’s final size was fixed at Eu1bn after gathering over Eu3bn in orders.

Royal Bank of Canada (RBC) looks set to successfully re-open the long end of the covered bond market. Pricing of 20bp over mid-swaps proved enough to attract Eu1.46bn of orders, allowing the final size of the deal to be set at Eu1.25bn. Final pricing is expected this afternoon (Wednesday).

The champagne was out for the launch of the first ever jumbo ship Pfandbrief, HSH Nordbank’s two year deal, which attracted more than Eu3bn of orders by midday CET and could be priced at the tight end of guidance.

Compagnie de Financement Foncier (CFF) has mandated Calyon, HSBC and Natixis for its benchmark sized obligation foncière to be launched in the near future. Lead managers are believed to be keeping their options open on the maturity of the deal.

Apparently gentlemen prefer blondes but marry brunettes. Well from a performance perspective, investors should buy covered bonds from more volatile jurisdictions in the short run and then dump these for more stable products in the secondary market.

The UK government’s extension of guarantees relating to Northern Rock obligations on 18 December was seen as good news for covered bondholders. Moody’s downgraded Northern Rock’s bank financial strength rating from D+ to E+, but said that the extension “further underpins the Aa3 bank deposit and senior debt ratings”.

Deutsche Postbank finishes the roadshow for its debut jumbo mortgage Pfandbrief tomorrow (Friday) and could be one of the first issuers into the market in the New Year. Marcus Chromik, head of primary capital markets at Postbank, told The Cover that with everyone hoping that high quality credits will reopen the market, Postbank could deliver just what the market is looking for.

HSH Nordbank has been stressing the mobility of the collateral of ship Pfandbriefe on the roadshow for its first benchmark. Whereas housing is susceptible to the economic ebbs and flows of its location, argues the issuer, ships can go wherever favourable winds blow.

HSH Nordbank has completed the European roadshow for the first euro benchmark ship Pfandbrief and, surprisingly, eschewed vague remarks on a launch date and instead attempted to book a slot in what is expected to be either a busy or a very difficult January for issuance. Meanwhile AIB Mortgage Bank raised Eu175m through a tap of its 2017 issue.

Deutsche Postbank has announced the launch of its Pfandbrief debt issuance programme, arranged by Citi. The programme will include both mortgage Pfandbriefe and public sector Pfandbriefe.

The prospect of the Pfandbrief Act being amended to raise the limit on the loan-to-value ratios of German residential mortgage collateral from 60% to 80% looks set to go the same way as the proposal to allow RMBS to be included in cover pools. As one investor said: “This would be the stupidest time to do that.”

The spectre of the market being split into “core” and “non-core” jurisdictions with different market-making conventions was raised by one leading covered bond investor today (Friday), following the general suspension of interdealer commitments on Wednesday.