Spain

Banesto (Banco Español de Crédito) yesterday (Wednesday) secured the tightest level for a cédulas since the market reopened in May when it priced a Eu1.25bn three and half year mortgage-backed issue at 45bp over mid-swaps. The issuer told The Cover that while other institutions may be waiting for spreads to tighten further, it was happy with its decision to launch a deal in the early days after the summer break.

Banesto (Banco Español de Crédito) this (Wednesday) morning launched the first single issuer cédulas since the beginning of June, a Eu1.25bn three and a half year mortgage-backed issue that will be priced at 45bp over mid-swaps, 75bp tighter than where the issuer sold a four year issue on 26 May.

The lowest rated Spanish covered bond yet is in the pipeline, after Moody’s assigned a provisional A1 rating to the cédulas hipotecarias of CajaSur.

Standard & Poor’s on Friday downgraded Banco Popular Español’s mortgage-backed covered bonds from AAA to AA+.

Fitch yesterday (Thursday) changed the outlook on Caixa Catalunya’s rating from stable to negative and withdrew the rating of the issuer and its cédulas hipotecarias, after the savings bank said that it was dispensing with the rating agency’s services as part of a cost-cutting drive.

La Caixa tapped into the tighter levels in the covered bond market to increase a five year cédulas hipotecarias by Eu750m yesterday (Thursday), rounding off what has been the busiest ever July for the euro jumbo market.

Moody’s yesterday (Thursday) downgraded BBVA, Banco Santander, Banesto, and Santander Consumer Finance by one notch, concluding a review initiated on 19 May.

La Caixa is today (Thursday) tapping a Eu1.25bn five year cédulas hipotecarias it launched on 14 May well inside the level at which it was first executed.

EuroWeek cartoonist Olly Copplestone’s take on this week’s Spanish exhibit.

A Eu1.45bn five year AyT Cédulas Cajas issue confounded sceptics by becoming the first multi-cédulas benchmark to have been successfully placed since November 2007 yesterday (Tuesday). One market participant even went so far as to describe it as marking a return to business as usual – albeit at wider levels.

The fate of a new AyT Cédulas Cajas issue hung in the balance today (Monday) as market participants discussed whether or not it was possible at the levels being sounded.

Several covered bond issuers are understood to be circling the market, hoping to pick off tighter levels. However, some are encountering resistance from investors, even if the European Central Bank’s purchase programme continues to underpin the market.