Spain

Fitch changed its outlook on Cajamar Caja Rural, Sociedad Cooperativa de Crédito from stable to negative yesterday (Monday) to reflect its deteriorating asset quality, exposure to the construction and real estate sectors, and a need to further rebalance funding towards customer deposits.

Banco Pastor yesterday (Thursday) launched a Eu1bn four and a half year cédulas hipotecarias in its first visit to the jumbo covered bond market since September 2006. The issue is the first not to have been priced at the tight end of guidance since the market reopened after the summer break, but the issuer told The Cover that it is happy with the level.

Banco Pastor is pricing a Eu1bn four and a half year cédulas hipotecarias issue this (Thursday) afternoon at 75bp over mid-swaps, after confirming the mandate for its new issue yesterday (Wednesday) afternoon.

Bank of Ireland as good as signalled the complete recovery of the covered bond market, in terms of access at least, by launching a Eu1.5bn five year deal that is the first Irish issue in the public markets since June 2007. And while spreads for such issuers may remain at unprecedented levels, the strong rally is nevertheless encouraging many credits to explore possible new issues.

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.