Spain

Banco Popular Español launched an exchange offer yesterday (Monday) featuring the first ever swap of senior unsecured debt into covered bonds.

Five issuers piled into the euro covered bond market in one of its busiest ever sessions this (Tuesday) morning to take advantage of supportive conditions. Supply included the first deals in a maturity longer than 10 years since June.

At least three issuers are understood to be preparing to launch sizeable new covered bonds this week despite no deals being live on the first morning of a working week for the first time since the benchmark market reopened in August. Meanwhile, Dexia has announced spreads on three new benchmarks it is offering as part of an exchange.

More peripheral covered bonds are being mulled for launch in the coming week, but any further issuance by lower ranked credits will have to contend with a weakening of demand, as hinted at by sub-Eu1bn deals for Italy’s Banco Popolare and Spain’s Bankinter yesterday (Thursday). Meanwhile, Compagnie de Financement Foncier has completed a third foray into the US 144A market.

Banco Popolare and Bankinter are bookbuilding for new issues today (Tuesday) amid signs that investor appetite for second tier issuers from peripheral countries could be flagging after a busy two weeks, particularly from Spain.

Caja Madrid yesterday (Tuesday) priced the biggest Spanish benchmark covered bond since the segment’s reopening this autumn, and the issuer told The Cover that several aspects of the transaction were encouraging, including its resilience to weakening market conditions on the day.

The Bank of Spain is introducing a new regulation requiring that Spanish issuers disclose detailed information on assets backing cédulas. Moody’s today (Monday) said that this should increase investors’ confidence in assessing credit risk and lower borrowers’ funding costs, even if it said that there is room for improvement, and other market participants gave qualified approval of the initiative.

Standard & Poor’s placed 53 Spanish multi-cédulas transactions on CreditWatch Negative on Friday and will review the potential impact of pressure on the creditworthiness of Spanish banks, deteriorating collateral values, and decreasing overcollateralisation available to the underlying cédulas.

La Caixa sold a Eu1bn three year cédulas hipotecarias yesterday (Thursday), with its standing helping it achieve the benchmark size in spite of pricing some market participants had considered ambitious. However, although the bank made it four cédulas in just over a week, market participants were ambivalent about the levels of subscription and the performance of the week’s supply, not only from Spain.

La Caixa this (Thursday) morning launched the fourth cédulas in a week, a three year issue that bankers away from the leads said was ambitiously priced, after Banco Sabadell yesterday became the first Spanish issuer to reach a Eu1bn deal size since July. The Spanish covered bond was the only new benchmark in the market this morning, after issuers including CM-CIC and Royal Bank of Scotland wrapped up new issues yesterday.

Banco Popular Español extended a reopening of the cédulas market yesterday (Tuesday) by becoming the first Spanish bank away from BBVA and the Santander group to launch a new deal after the summer break. The issuer told The Cover that its success reflected growing interest from international investors.

UniCredit launched its first benchmark obbligazioni bancarie garantite issue of the year this (Tuesday) morning to extend the market’s post-holiday reopening to Italy, while Spain’s Banco Popular Español is offering a record spread for a Eu500m minimum three year cédulas issue.