The Netherlands

Books on Dutch mortgage lender Delta Lloyd’s Arena 2011-1 RMBS will close on Friday, according to syndicate bankers managing the sale. Joint leads Rabobank and Royal Bank of Scotland are still waiting for a number of accounts to come in but books are building for the publicly sold senior tranches.

Guidance on Arena 2011-1, the first European RMBS of 2011, will be 105bp-110bp on the A1 notes and 145bp-150bp on the A2s, but deal progress has been slow, as harsher regulatory disclosure requirements start to bite.

Rabobank and Royal Bank of Scotland will take Delta Lloyd’s Arena 2011-1 RMBS on the road this week, in what could be the first European RMBS of 2011.

The covered bond market has experienced its busiest ever week with as many as 15 deals pricing, giving a grand total of about Eu19bn over the holiday shortened week.

ABN Amro sold a Eu1.25bn seven year transaction yesterday (Wednesday), which leads ABN, BNP Paribas, Crédit Agricole and DZ Bank priced at 70bp over mid-swaps.

Primary issuance continues to power ahead with five deals pricing yesterday and a further five deals expected to price this afternoon. Several more have been announced but, in a possible sign of things to come, two have been postponed and there is speculation that another is struggling.

ING sold a Eu1.25bn seven year transaction yesterday (Tuesday), which priced at 60bp over mid-swaps, in line with guidance, via leads Barclays, ING, Natixis and UniCredit.

After a very quiet December, market participants are not surprised to see a strong start to the primary market in the New Year, with one deal already priced and as many as seven others on the way.

Following a premature halt to new issuance this year, syndicate bankers expect the onset of 2011 to bring a rush of benchmark covered bond supply as issuers hasten to execute funding plans in anticipation of continued market volatility. A liquid buy-side should ensure that deals are readily absorbed - at least initially.

Rough market conditions and dwindling liquidity mean that few to no deals could be launched next week although some issuers are still monitoring the market, according to syndicate bankers.

The covered bond market could still be open for deals from high quality issuers and solid jurisdictions, according to syndicate bankers, despite wider market conditions quickly deteriorating yesterday (Monday) over fears that political turmoil in Ireland could derail implementation of a European Union and International Monetary Fund bailout package.

The pace of benchmark covered bond supply could step up a gear this week, with Credit Suisse eyeing the middle of the week for the launch of its inaugural issue, a Dutch bank said to be close to coming to market and others deciding on next steps after having finished roadshows last week. But another issuer has put primary market plans on hold until next year.