Italy

Banca Popolare di Milano’s covered bonds were affirmed by Fitch on Friday after the issuer told the rating agency that it would take remedial action following a downgrade of its senior rating the previous day.

Fitch downgraded Banca Popolare di Milano from A to A-, on stable outlook, yesterday (Thursday), reflecting a deterioration in the Italian bank’s underlying asset quality over the past 18 months.

Banca Carige’s outlook has been changed from negative to stable by Fitch, which said yesterday (Thursday) that the Italian bank should remain well positioned in a challenging operating environment.

Hopes that benchmark covered bond issuance could restart next week have been reined in after reports that French president Nicolas Sarkozy threatened to pull out of the euro-zone contributed to renewed volatility today (Friday).

Standard & Poor’s downgraded Intesa Sanpaolo and revised the outlook on UBI Banca’s rating from stable to negative on Friday, because it expects low growth in Italy’s economy to pressure the banks’ asset quality.

UniCredit plans to amend a type of SARA clause in its obbligazioni bancarie garantite (OBG) programme that effectively nullifies the provision, but the change will not affect the bank’s AAA covered bond rating, said Fitch on Friday.

Standard & Poor’s removed 10 covered bond programmes from review after affirming their ratings at AAA on Friday, but downgraded five programmes and these remain on review. The actions were taken on the last day of a four month period by the end of which S&P said it aimed to have resolved all 98 ratings it placed on review in December after introducing a new methodology.

Intesa Sanpaolo yesterday (Thursday) launched the first benchmark off its public sector covered bond programme, a Eu2bn seven year deal that surpassed the size initially targeted by the issuer, and will now focus on readying a mortgage-backed programme for issuance in the coming months. Meanwhile, Caisse de Refinancement de l’Habitat added Eu800m to a 3.75% 2020 issue and La Caixa today announced a mandate.

Intesa Sanpaolo has launched its inaugural covered bond, a Eu2bn seven year Italian public sector deal that will be priced at 50bp over mid-swaps, in line with guidance, later today (Thursday). Meanwhile, France’s Caisse de Refinancement de l’Habitat has reopened a 2020 issue and Spanish savings bank Caja Murcia is on a roadshow.

Helaba will today (Wednesday) price its first jumbo Pfandbrief in six years, a Eu1bn seven year issue that, in the words of one syndicate official, met with a “complete stampede” for paper. Meanwhile, Ibercaja priced a Eu500m five year deal and Intesa Sanpaolo is expected to make its debut shortly.

Three issuers this (Monday) morning launched or tapped benchmark covered bonds in a market buoyed by an agreement over the weekend on terms of an emergency loans package for Greece. Meanwhile, Dexia Municipal Agency has mandated for a deal that could be launched tomorrow (Tuesday).

Stadshypotek and Société Générale today (Tuesday) announced mandates for benchmark covered bonds that market participants said are likely to be launched tomorrow (Wednesday). At least one other issuer is said to be planning to access the market, despite a short working week and reduced investor availability due to the Easter holidays.