Portugal

Banco Espírito Santo nipped into the covered bond market to price a Eu1bn long five year obrigacões hipotecarias issue yesterday (Tuesday) afternoon. The issuer told The Cover that the transaction allowed it to achieve a goal it had set in the market’s darkest days.

Banco Espírito Santo will today (Tuesday) price a Eu1bn long five year obrigacões hipotecarias benchmark at the tight end of guidance that was itself set at a tighter range than that whispered yesterday (Monday). Meanwhile at least two other issuers are understood to be eyeing Thursday for the launch of new issues.

Caisse de Refinancement de l’Habitat is today (Monday) increasing a 5% October 2013 issue by Eu410m at a level described as “aggressive” by a syndicate official on the deal. Meanwhile, Banco Espírito Santo is expected to hit the market before mid-week holidays in the US and France.

Banca Santander Totta yesterday (Wednesday) priced a Eu1bn five year mortgage-backed benchmark in the middle of guidance of the 55bp over mid-swaps area. The issuer took heed of a weaker market and did not try to force the pricing, said a syndicate official at one of the leads.

Banco Comercial Português yesterday (Wednesday) priced its first covered bond benchmark since April 2008, but a full new issue pipeline and a strong performance of outstanding Portuguese covered bonds prompted the issuer to forego a roadshow and a market sounding in preparation of its transaction, according to one of the leads.

A series of new issues at aggressive levels in what could be the busiest ever week in the covered bond market has raised fears among investors that the asset class is facing a bubble.

Bilbao Bizkaia Kutxa will this (Tuesday) afternoon price its Eu1bn five year cédulas hipotecarias debut at 58bp over mid-swaps, a “punchy” level that bankers said signalled that pricing expectations might need to be revised tighter. And a tighter level than expected is already being rumoured on the first of several new issues in the pipeline, which includes Dutch, Portuguese and Italian supply.

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 today (Friday) changed the outlook on the rating of Caixa Geral de Depósitos from stable to negative, following a similar revision of the Republic of Portugal’s outlook yesterday (Thursday).

Fitch yesterday (Monday) revised the outlook on Banco BPI’s rating from stable to negative.

Standard & Poor’s yesterday (Thursday) downgraded Banco Comercial Português from A to A-.

Caixa Económica Montepio Geral priced its inaugural covered bond, a Eu1bn three year mortgage-backed deal, on Friday. It was the first Portuguese jumbo without a triple-A rating from Moody’s, but the issuer told The Cover that investors did not seem overly concerned about this.