Italy

Bank of Ireland as good as signalled the complete recovery of the covered bond market, in terms of access at least, by launching a Eu1.5bn five year deal that is the first Irish issue in the public markets since June 2007. And while spreads for such issuers may remain at unprecedented levels, the strong rally is nevertheless encouraging many credits to explore possible new issues.

Fitch yesterday (Tuesday) changed the rating outlook on Banca Popolare di Milano from stable to negative.

SEB AG this (Tuesday) morning issued a Eu500m three year deal via UniCredit. Meanwhile, the European Central Bank has reported that Eu162m of covered bonds have been purchased under its programme.

Moody’s yesterday (Wednesday) concluded its review of 22 Italian banks, including Banca Popolare di Milano, that was initiated on 18 May.

UniCredit yesterday (Monday) priced the first Italian covered bond issue since Banca Popolare di Milano inaugurated the obbligazioni bancarie garantite market in July 2008. The issuer told The Cover that the Eu2bn seven year mortgage-backed jumbo was priced at a level it deserved, after the re-offer took several market participants by surprise.

UniCredit is set to price its first Italian covered bond issue well inside expectations this (Monday) afternoon after having generated strong demand for its obbligazioni bancarie garantite (OBG).

UniCredit, which finished a European non-deal roadshow of its obbligazioni bancarie garantite programme this week, is expected to consider a debut issue soon, but the issuer stressed its long term strategy for Italian covered bond issuance in an interview with The Cover. The issuer is also hopeful that it can position its OBGs “towards the tighter end” of the market.

Moody’s yesterday (Thursday) placed Banca Popolare di Milano on review for possible downgrade, but affirmed the issuer ratings of four other Italian banks that have issued or plan to issue covered bonds, as part of rating actions on 43 Italian banks and financial institutions.

In brief: UniCredit will kick off a non-deal European roadshow on Monday to market its obbligazioni bancarie garantite programme to institutional investors.

Fitch yesterday (Thursday) downgraded two western European covered bond issuers after a review of European banks’ exposures to eastern Europe and the Commonwealth of Independent States (CIS).

Standard & Poor’s on Friday revised from stable to negative the outlook on four regional Italian banks, including Banca Popolare di Milano and Banca Carige, both of whom have covered bond programmes.

Standard & Poor’s yesterday (Wednesday) downgraded the rating of UniCredit SpA from A+ to A, and revised the outlook from negative to stable. The ratings of several related entities were also cut by one notch.