Spain

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.

Ahorro Corporación Financiera is said to be preparing an AyT Cédulas Cajas issue for launch next week that could be the biggest test of the covered bond market since the European Central Bank’s Eu60bn purchase programme was announced.

Further new issuance is on the cards for this week, despite the beginning of the European summer holiday season starting to have an impact on the pace of supply. Meanwhile, the European Central Bank has reported a further Eu43m of purchases under its programme and president Jean-Claude Trichet gave the asset class another ringing endorsement.

Standard & Poor’s placed Banco Popular Español’s cédulas hipotecarias on negative review on Friday because of “significant” cashflow gaps.

Fitch said today (Friday) that recent Spanish legislative changes have improved the country’s covered bond framework and that it will amend the Discontinuity Factors it assigns cédulas hipotecarias.