Portugal

The books were this (Thursday) morning opened on Millennium BCP’s long awaited covered bond and rapidly filled. However, some market participants said that the exercise reminded them of Banco Espiríto Santo’s Eu1.25bn three year debut in January, which sparked a repricing of the secondary market.

The disarray in the primary market this week has not deterred issuers old and new from pushing on with their covered bond plans. DnB Nor has picked leads for a new benchmark and Banco BPI has announced the arrangers of its programme and scheduled a roadshow.

Canadian Imperial Bank of Commerce plans to roadshow a new covered bond programme early in the second quarter, following in the footsteps of not only those officially in the pipeline, but a variety of other issuers who have been visiting investors but adopting a lower profile.

The covered bond market endured a rocky morning today, with spreads widening alongside heavy falls in equities, giving the European Covered Bond Council further food for thought ahead of its meetings in Milan later this week. But Germany could once again prove the exception in the primary market.

Sweden’s Nordea Hypotek AB is to return to the covered bond market, having mandated BNP Paribas, HSBC, Nordea Markets and UniCredit as lead managers for a new euro denominated benchmark from it Eu10bn covered bond programme. Two Portuguese issuers are gearing up for their scheduled roadshows, with the mortgage pipeline showing signs of getting moving again.

Millennium BCP has mandated Barclays Capital, Deutsche Bank, Millennium Investment Banking and Natixis for a jumbo issue to be launched after a roadshow. Meanwhile OTP Mortgage Bank is sounding out the market for a two year deal through ABN Amro and Deutsche Bank at 60bp-65bp over mid-swaps.

Portugal’s Caixa Geral de Depósitos (CGD) has mandated ABN Amro, Caixa-Banco de Investimento, Dresdner Kleinwort and Natixis as bookrunners for a benchmark sized covered bond.

Banco Espírito Santo priced its first covered bond yesterday at 20bp over mid-swaps. The Eu1.25bn three year mortgage backed deal received orders of almost Eu1.9bn, demonstrating the robust nature of the primary market and enjoying a strong secondary performance.

Banco Espirito Santo (BES) has mandated Barclays Capital, BES, Calyon and Deutsche Bank for its new Portuguese mortgage backed covered bond.

Portugal’s Banco Santander Totta has mandated Morgan Stanley to arrange its covered bond programme, and BNP Paribas, Morgan Stanley and UniCredit to lead manage its inaugural issue. The bank joins Banco Espírito Santo and Caixa Económica Montepio Geral in the pipeline for what should be a busy Portuguese sector next year.

Banco Espírito Santo will launch its inaugural Portuguese covered bond benchmark after a European roadshow, having announced Barclays Capital, Calyon, Espírito Santo Investment and programme arranger Deutsche Bank as bookrunners today (Tuesday).

Fitch Ratings delivered an optimistic assessment of the performance of the leading Portugese banks in the first half of 2007. The report, published on Friday, expects the banks to maintain this strong performance despite recent difficult market conditions.