Spain

Moody’s yesterday (Wednesday) placed on review for possible downgrade the Aaa ratings of seven cédulas hipotecarias programmes, four cédulas territoriales programmes and 57 series of multi-cédulas.

Moody’s yesterday (Tuesday) put on review for downgrade the senior ratings of 34 Spanish banks because it expects their asset quality to continue to deteriorate, resulting in significantly higher credit losses than were previously incorporated in the ratings, straining capitalisation. The move threatens the ratings of some cédulas hipotecarias.

La Caixa yesterday (Thursday) rounded off with a flourish the busiest week in the covered bond market since May 2008, pricing a Eu1.25bn five year cédulas hipotecarias flat to Santander, even though market participants had said that such pricing was aggressive. Meanwhile, a French issuer tapped the market much tighter than two weeks ago and a Dutch name is said to be preparing to go out on the road.

The books on a five year cédulas hipotecarias for La Caixa are due to close at 1430 CET today (Thursday), with pricing fixed at flat to the level at which Santander reopened the Spanish market on Monday.

Despite considering a new issue, La Caixa looks unlikely to follow-up on Monday’s reopening of the Spanish market by Santander, but a French issuer is instead said to be due to launch a benchmark deal today (Wednesday).

Santander’s Eu1.5bn five year cédulas hipotecarias yesterday (Monday) was the first jumbo since late March and covered bond bankers are hopeful that there will now be further supply given that, with spreads tighter post-ECB, issuers will now be ready to pay the price necessary to tap into buoyant demand for spread product.

Santander is expected to price the first benchmark Spanish covered bond since June 2008 at the tight end of guidance this (Monday) afternoon, riding a wave of positive sentiment in the market sparked by the European Central Bank’s announcement last Thursday of a Eu60bn plan to buy covered bonds.

The debut cédulas hipotecarias issued last week by Barclays Bank SA, the Spanish arm of the UK banking group, are part of a wider funding strategy of “maximising securitisability” of the bank’s balance sheet, a treasury official at the issuer told The Cover.

In brief: The Royal Decree finalising the update to Spain’s cédulas framework was published in the country’s official gazette on Saturday and came into force yesterday (Monday).

Fitch on Tuesday changed the outlook on the issuer rating of Caja de Ahorros y Pensiones de Barcelona (La Caixa) from stable to negative, but revised upward its expectation of government support for the Spanish savings bank.

Barclays Bank SA, the Spanish arm of the UK banking group, has issued cédulas hipotecarias for the first time.

Spain’s Council of Ministers on Friday approved a long-awaited royal decree that will bring into force secondary regulations that clarify and develop the country’s covered bond framework.