Spain

Fitch placed AAA mortgage covered bonds issued by Cajamurcia on Rating Watch Negative yesterday (Monday), after placing the issuer on RWN on Friday because its integration into a new banking group with three other cajas was approved.

Fitch downgraded Spanish bank La Caixa from AA- to A+, on stable outlook, yesterday (Monday), because of challenges to the bank’s asset quality posed by a downturn in the Spanish property market and the country’s weak economy.

SNS Bank will today (Tuesday) price the second long dated Dutch benchmark covered bond in a week, while Banco Popular Español has set the spreads for an exchange that is open until Friday and a Swedish covered bond issuer has set up a US MTN programme.

Fitch placed Caja de Ahorros de Murcia and three other Spanish banks on Rating Watch Negative on Friday, because the General Assemblies of the four cajas approved an integration contract to form a banking group through an Institutional Protection Scheme (SIP). The rating agency said the SIP contract is expected to include a legally-binding cross-guarantee mechanism encompassing solvency and liquidity.

New issues for GCE Covered Bonds and UniCredit Bank Austria and a large Caja Madrid tap took this week’s supply of Eu500m-plus deals to a solid Eu6.7bn, with GCE said to have benefitted from a recent paucity of new three year issuance from so-called core jurisdictions.

Fitch placed Caja Madrid on Rating Watch Negative yesterday (Thursday) and Bancaja and Caixa Laietana on Rating Watch Positive, following approval of an integration contract by the General Assemblies of the three cajas and several others to form a group through an Institutional Protection Scheme (SIP).

A new burst of issuance hit the covered bond market this (Thursday) morning after a breather yesterday, with GCE Covered Bonds and UniCredit Bank Austria launching new deals and Caja Madrid offering an increase of a 2014 issue.

Banco Pastor yesterday (Tuesday) became the seventh Spanish issuer to tap the covered bond market in just under three weeks, and the issuer told The Cover that it was “delighted” with the transaction and suffered no ill effects from one lead manager dropping out.

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.