Spain

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.

Banesto sized a five year cédulas hipotecarias at Eu600m yesterday (Thursday), taking Eu500m-plus covered bond issuance over the past five working days to Eu6.9bn. The Spanish issuer told The Cover that it was happy to have been able to issue successfully given how tricky the market has been.

Banesto showed the breadth of the covered bond market’s post-holiday reopening today (Thursday) with a Eu500m minimum five year cédulas hipotecarias. Meanwhile, Berlin Hyp priced a Eu500m issue in the face of low yields and spreads, while Bawag PSK finally emerged after announcing plans for a new issue back in May.

Spain’s Bancaja and Banco de Valencia have taken remedial action to support multi-cédulas in which they participate, after the banks' ratings were cut by Fitch at the beginning of June.

Fitch cut mortgage-backed covered bonds issued by Spain’s Caja Navarra from AAA to AA+ today (Wednesday), because of a downgrade of the bank’s rating from A to A- on 30 July.

Fitch downgraded mortgage-backed covered bonds issued by Spain’s Caixanova from AA+ to AA and placed them on Rating Watch Negative yesterday (Tuesday), because of a downgrade on Monday of Caixanova from A- to BBB+.

Caja Madrid has played down buybacks of around Eu1.5bn of its cédulas hipotecarias that were referred to in a regulatory notice filed yesterday (Tuesday) with Comisión Nacional del Mercado de Valores, Spain’s stock market regulator.

Fitch downgraded Caixanova from A- to BBB+ and placed it on Rating Watch Negative, yesterday (Monday), because of advanced merger talks with Gaixa Galicia.

Market conditions are conducive to new covered bond issuance – even from peripheral jurisdictions – but with the holiday season in full swing issuers may not be in a position to take advantage of any opportunities, according to syndicate bankers.