Spain

Investors’ perceptions of the crises in Spain and Ireland are excessively pessimistic because of the way the media reports them, according to bankers at the Euromoney/ECBC Covered Bond Congress in Paris on Thursday.

In brief: Moody’s today (Wednesday) assigned provisional a triple-A rating to Bilbao Bizkaia Kutxa’s cédulas hipotecarias.

Property company Martinsa-Fadesa’s insolvency, negative rating actions on financial institutions, and, at last, falling house prices – is this Spain’s economic slowdown turning into a hard landing, or just a case of overblown bad press? The Cover spoke to bankers and analysts to gauge sentiment in these testing times.

The 4% limit on covered bond issuance as a percentage of total liabilities is one of the most restrictive parts of the policy statement released by the Federal Deposit Insurance Corporation last week. The Cover spoke to the Independent Community Bankers of America about their views on the cap, and whether pooled issuance was a prospect in the US.

Deutsche Bank may have come first in the all benchmarks ranking for the first half of 2008, but it was by no means the strongest across all markets. Here The Cover reveals the top banks in each of the biggest sectors and examines where the leading banks’ weaknesses lie.

In brief: Bilbao Bizkaia Kutxa (BBK) has mandated leads for its debut euro covered bond.

Caja de Ahorros del Mediterráneo continued the Spanish march to increasingly wide levels when it priced its debut Eu1bn two year cédulas on Friday afternoon. Despite claims last week that this was damaging the wider market, one lead manager robustly defended the pricing, saying it should have no impact on core names.

Caja de Ahorros del Mediterráneo looked to be taking the record covered bond benchmark spread 7bp wider this (Friday) morning with guidance of 80bp over mid-swaps for a two year cédulas just two days after Banco Pastor priced its Eu1bn two year at 73bp over. But while the pricing was seen as necessary for the deal to get done, it caused dismay in the wider market where other potential issuers have been finding soft-sounding frustrating.

Spain’s Banco Pastor successfully priced a new Eu1bn two year cédulas hipotecarias at the widest ever level for a publicly offered covered bond, with one lead manager saying this was simply the level investors would buy at, and that market volatility meant that even comparing new issues to bonds launched as recently as May was fruitless.

An unlikely candidate reopened the covered bond market this (Wednesday) morning, with Banco Pastor opening books on a two year cédulas hipotecarias with price guidance that made it the widest ever publicly offered covered bond.

In brief: Spains’s Cajamar has mandated banks for its inaugural euro cédulas hipotecarias.