Spain

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.

Caja Madrid was downgraded from AA- to A+ by Fitch yesterday (Wednesday) afternoon because of a decline in its asset quality and risk concentration.

Fitch yesterday (Tuesday) downgraded Banco Popular Español from AA to AA-, on concerns over its funding mix and its exposure to the worst-hit sectors of the Spanish economy.

The flow of Spanish government guaranteed bond issuance is showing no signs of stopping as two more borrowers are preparing issues, of which at least one will be priced next week.

The Spanish authorities’ rescue of Caja de Ahorros de Castilla-La Mancha (CCM) is not likely to affect Fitch’s AAA ratings of multi-issuer cédulas transactions to which the savings bank contributes, said the rating agency yesterday (Thursday).