Germany

Depfa is setting up a 144A US MTN programme and is on the road in the States. Until now Depfa has issued its 144A benchmark deals on a standalone basis.

Banque Fédérale des Banques Populaires has mandated Natixis to arrange a Eu25bn covered bond programme to refinance prime home loans originated by the 20 members of the group.

Berlin Hannover Hypothekenbank (BHH) is to tap its Eub1bn 4.125% public sector Pfandbrief due 28 March 2017, to the tune of Eu125m.

Thomas Ahman, head of funding and liquidity at Stadshypotek in Stockholm, stressed today (Wednesday) that the issuer is in no hurry to tap the euro market and has stepped up its activity domestically.

Landesbank Rheinland-Pfalz’s Eu500m five year public sector Pfandbrief was the only new issue today, with the market quiet ahead of tomorrow’s holiday in Germany.

Landesbank Baden-Württemberg priced its largest ever jumbo Pfandbrief today (Thursday), a Eu2bn five year public sector issue that has reinforced the reopening of the primary covered bond market.

Landesbank Baden-Württemberg will launch the first jumbo Pfandbrief since the market ground to a halt this summer, a five year public sector deal mandated to Citigroup, LBBW and UniCredit. Early talk suggests a spread of mid-swaps flat.

Pfandbrief issuers and investors appear to be playing a game of chicken, in which both are hoping that the other will give in first and compromise on their pricing expectations.

While diversification by issuers into alternative currencies is one way of addressing the problem of bottlenecks in the market for euro-denominated jumbo covered bonds, another is for issuers to explore alternative sub-segments of the product, such as the market for Namenspfandbriefe. Philip Moore reports.

HSH Nordbank said yesterday (Thursday) that it plans to launch its first issue of Schiffspfandbriefe soon, having been awarded provisional triple-A ratings from Moody’s for its shipping loan backed covered bonds.

Since HBOS blazed the trail in 2003, the structured covered bond has spread to other jurisdictions, including Germany, where Landesbank Berlin is attempting to launch the first non-Pfandbrief German covered bond. But is this development good for the long term health of the market? Philip Moore reports.

Is including mortgage backed securities (MBS) in covered bond pools an important step forward for the covered bond market, or a further erosion of the quality of the product and of the clarity of the legal framework governing its issuance? Philip Moore reports.