Italy

An April 2016 Caisse de Refinancement de l’Habitat issue was the only new benchmark covered bond live in the market this (Monday) morning, but with three other issuers lining up deals and two more borrowers announcing mandates the pipeline of forthcoming new issues and roadshows is well stocked.

Banca Popolare di Milano maintained a promise to investors to issue a sizeable covered bond once a year when it on Tuesday sold a Eu750m five year obbligazioni bancarie garantite issue, an official at the issuer told The Cover.

Banca Popolare di Milano, Kutxa and Swedbank Mortgage accessed the benchmark covered bond market this (Tuesday) morning to offer investors a medley of new euro issues after a day of preparation yesterday that one syndicate banker said was necessitated by limited liquidity in the market.

Swedbank Mortgage and Banca Popolare di Milano are lining up new issues that will probably be executed tomorrow (Tuesday), after syndicate bankers said the market opened strongly today.

Moody’s downgraded Banca Monte dei Paschi di Siena (MPS) from A1 to A2, on stable outlook, yesterday (Wednesday), because of sizeable challenges facing the Italian bank.

Italy’s Intesa Sanpaolo relaunched issuance of covered bonds secured by residential mortgage backed securities when it yesterday (Wednesday) sold a Eu1bn five year issue that a syndicate official at one of the leads said successfully overcame reduced line availability for Italian debt and some resistance to the deal’s structure. Axa Bank Europe is expected to provide a second test of appetite for such product shortly.

Intesa Sanpaolo has opened books on its first mortgage covered bond, backed by self-originated residential mortgage backed securities, with what a syndicate official described as an “eye-catching” level. Meanwhile, Nordea is preparing a roadshow to introduce Finnish covered bond plans.

Two inaugural euro covered bonds backed by residential mortgage backed securities were this (Monday) being flagged for possible launch this week.

BNP Paribas Public Sector SCF launched a Eu1bn five year obligations foncières today (Wednesday) that is only the fourth French benchmark covered bond sold in six-and-a-half weeks, while yet another Italian is planning to tap the market and the UK’s Royal Bank of Scotland is lining up a 10 year Regulated Covered Bond.

Landesbank Hessen-Thüringen offered investors a rare opportunity to participate in a sizeable Pfandbrief transaction and gain exposure to its credit today (Tuesday), with a Eu750m four year issue duly snapped up by accounts in a market where jumbo Pfandbriefe have been few and far between.

The covered bond market is in good condition and generally open for issuance, syndicate bankers reported today (Monday), but with no new mandates publicly announced since last Thursday a deal from Italy’s Intesa Sanpaolo was this morning the most concrete new issue project in the pipeline for the week.

Italy’s UBI Banca sold a Eu500m five year covered bond yesterday (Thursday) after coming up against reduced demand for obbligazioni bancarie garantite issues and for its credit following concentrated supply from the country, but nonetheless attracted quality orders, according to a syndicate banker at one of the leads.