Spain

Bankers said that Banco Bilbao Vizcaya Argentaria turned over a new leaf with the first Spanish covered bond of the year today (Tuesday), a benchmark transaction that – like deals for BNP Paribas and Dexia Kommunalbank Deutschland – is set to be priced at the tight end of guidance on the back of an oversubscribed order book. The trio of deals mark the reopening of the jumbo market in 2010.

Issuers are limbering up to launch the first benchmark covered bonds of 2010, with three institutions having mandated for transactions that could hit the market this week and others busy with preparations.

Moody’s downgraded 45 series of multi-cédulas yesterday (Thursday), hitting the only segment of the covered bond market not to have faced any reviews as a result of Standard & Poor’s revised criteria, which were announced on Wednesday.

Fifty-four multi-cédulas are under analysis by Fitch after the rating agency on Friday announced new rating criteria for the asset class to harmonise them with RMBS and SME CDOs and taking into account Spain’s updated covered bond framework.

Ahorro Corporación Financiera launched the largest 10 year Spanish covered bond since July 2007 yesterday (Tuesday), a Eu500m AyT Cédulas Cajas issue. An ACF official told The Cover that the size matched investor and savings bank interest in the transaction.

New issues from Spain and Norway launched this (Tuesday) morning after UBS’s second benchmark covered bond yesterday (Monday) are making this week busier than most market participants had been expecting.

CIF Euromortgage yesterday (Thursday) priced a Eu1.25bn April 2012 obligations foncières issue at 10bp over mid-swaps, matching Compagnie de Financement Foncier in achieving the tightest level for a benchmark covered bond this year. Meanwhile, Caja Murcia’s issuance plans are understood to be on hold.

Three-quarters of a Eu500m five year Ibercaja cédulas issue launched yesterday (Tuesday) was sold to domestic investors, according to a banker at one of the leads, with the approaching year-end and non-jumbo format limiting the potential investor base for the deal.

Ibercaja has closed the order books for a Eu500m five year cédulas issue, which is due to be priced at the tight end of guidance later today (Tuesday).

Westdeutsche Immobilienbank has wrapped up a Eu500m three and a half year issue this (Monday) morning and Ibercaja is soft-sounding for a similarly sized five year deal.

In brief: Ibercaja is expected to launch its first benchmark covered bond early next week, while Caja de Ahorros de Murcia has mandated leads for a new issue.

A Eu1bn five year cédulas hipotecarias priced for Caja Madrid yesterday (Thursday) brought the number of benchmark issues from Spain launched since the beginning of September to 10, representing a concentration of activity unmatched by recent supply from other jurisdictions.