North America

The US Covered Bond Council, a forum sponsored by the Securities Industry and Financial Markets Association (Sifma), has questioned the Federal Deposit Insurance Corporation’s understanding of proposed US covered bond legislation and existing law following comments made by the FDIC at a housing finance conference last week.

Fitch placed mortgage backed covered bonds issued by BA Covered Bond Issuer (BACBI) on negative review on Tuesday, after placing Bank of America NA on Rating Watch Negative on Friday.

The Federal Deposit Insurance Corporation wants to work together with Congressional proponents of a US covered bond market to establish “balanced” covered bond legislation to foster such a market, FDIC chairman Sheila Bair said at a housing finance symposium yesterday (Monday). Last week Congressman Scott Garrett told a conference in New York he was “cautiously optimistic” that US covered bond legislation could be finalised before the end of next year.

Fitch placed Bank of America NA on Rating Watch Negative on Friday, following initial interpretation of the Dodd-Frank Wall Street Reform & Consumer Protection Act and its implications for systemically important financial institutions.

Belgium’s Axa Bank Europe secured the first refinancing of its mortgage business via covered bonds today (Friday), with Axa Bank Europe SCF receiving solid demand for an inaugural, Eu750m 10 year obligations foncières issue.

SpareBank 1 Boligkreditt sold a $1.5bn (Eu1.077bn) three year benchmark in the US market yesterday (Wednesday) and the issuer told The Cover that the transaction was part of a strategic move to diversify its investor base.

DnB Nor Boligkreditt debuted in the US market with a $2bn (Eu1.43bn) five year issue on Wednesday that gave it tighter pricing than was available in euros, but the issuer told The Cover that strong US demand was the most pleasing aspect of the benchmark.

Canadian Imperial Bank of Commerce issued the first Kangaroo covered bond since March 2007 yesterday (Thursday), pricing a A$750m (Eu530m or C$748m) three year deal at 48bp over swaps, the tight end of 50bp area guidance, on the back of a book of more than A$1bn.

Italy’s UBI Banca will today (Thursday) price a Eu500m five year issue on the back of modest demand, while DnB Nor Boligkreditt yesterday sold its first dollar benchmark covered bond and Canadian Imperial Bank of Commerce priced its first covered bond in the Kangaroo market.

Skandinaviska Enskilda Banken will today (Wednesday) price a Eu1bn seven year issue at the tight end of revised guidance after meeting with strong demand for the first Swedish euro benchmark since June. Meanwhile, Italy’s UBI Banca is gauging interest for a new issue, Canadian Imperial Bank of Commerce has opened books for an Australian dollar debut, and a mandate for a debut off an innovative programme has been added to the deal pipeline.

Spain’s Unicaja will today (Tuesday) price a Eu750m five year cédulas hipotecarias issue, more than a marketed Eu500m minimum deal size, although syndicate bankers away from the leads said the deal had at times appeared to struggle. Issuance was otherwise restricted to a tap and floating rate note, although there are rumours of deals in the pipeline and CIBC has mandated for an Australian dollar debut.

EuroWeek and The Cover, in association with Barclays Capital and Goldman Sachs, sought out the views of leading issuers, investors and Congressman Scott Garrett to discuss the US dollar covered bond market’s potential with respect to domestic and foreign issuers, as well as legislative and regulatory issues facing the asset class in the US.