Luxembourg

Citigroup has hired Deutsche Bank’s head of equity capital markets for France to build its market share across France, Benelux and Switzerland.

The most eagerly awaited of all quota approvals came on Thursday with the news that the People's Bank of China (PBoC) had finally granted a Rmb50bn ($8.6bn) renminbi qualified foreign institutional investor (RQFII) quota to Luxembourg, a world leading domicile for investment funds.

Clearstream, the international central securities depository of Deutsche Börse Group, is making further progress in its Asia strategy by opening offshore renminbi cash correspondent bank (CCB) accounts with Chinese banks based in Frankfurt, Luxembourg and Singapore.

NORD/LB Covered Finance Bank is expected to open books for its inaugural five year €500m Lettres de Gage Publiques on Monday after mandating leads on Friday. Bankers expect a less busy week ahead, but believe there is scope for one or two other deals to be announced at short notice. Market conditions remain strong and recent issuance, such as UniCredit’s conditional pass through, have all performed.

NordLB Covered Finance Bank (NORD/LB CFB) has mandated leads for a European roadshow to sell its first benchmark sized covered bond under the recently amended Luxembourg legal framework. Though this deal will be backed by public sector assets, the law allows for a much wider pool of movable assets, suggesting there is potential for more innovative deals to follow.

Industrial and Commercial Bank of China's European arm wrapped up a series of investor meetings in December for its debut Renminbi Qualified Foreign Institutional Investor (RQFII) fund, which it had established in Luxembourg in October. As the very first RQFII fund to have 100% exposure to China’s domestic bond market, the benchmark product has attracted big interest from European investors, as well as some concerns about what is still a new concept, the bank has told GlobalRMB.

Time is running out for borrowers yet to make programme changes in advance of Standard & Poor’s new counterparty criteria, which comes into force in early January. The rating agency has placed another six programmes on review for downgrade, and warned there could be others.

Amid growing concern over peripheral euro sovereigns, covered bond analysts are focusing on the exposure to the troubled periphery of public sector cover pools in core jurisdictions.

Lettres de gage publiques issued by NordLB Covered Finance Bank have been rated by a second rating agency, with Fitch on Friday assigning them a AAA rating.

Standard & Poor’s has affirmed at AAA the public sector-backed covered bonds issued by Dexia LdG Banque and Eurohypo Luxembourg, but assigned a negative outlook to the latter’s because their rating would automatically be cut in the event of an issuer downgrade.

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.

Eurohypo Luxembourg yesterday (Tuesday) launched a Eu750m three year public sector lettres de gage transaction a week earlier than planned in response to an issuance window that manifested itself quickly, the issuer told The Cover.