The Netherlands

A Eu1bn five year Caja de Ahorros del Mediterráneo cédulas hipotecarias on Friday concluded a difficult week in the covered bond market to the issuer’s and the leads’ satisfaction. This week looks set to be quiet again, with two or three issues expected, although market participants were this (Monday) morning more relaxed about the outlook than they were last Monday.

Dutch covered bonds registered with the country’s central bank under the Dutch covered bond law will benefit from higher continuity in the event of a default of the issuing bank, said Fitch yesterday (Tuesday). The rating agency has improved the Discontinuity Factors for all registered Dutch covered bonds, and separately affirmed NIBC Bank’s covered bonds at AAA.

SNS Bank hopes that by the end of October its covered bond programme will be registered with the Dutch central bank and compliant with the Capital Requirements Directive, an official at the issuer told The Cover. And, market conditions permitting, NIBC could launch its first public covered bond at the beginning of October, according to an official at the bank.

Barclays Bank will tomorrow (Tuesday) launch the first benchmark UK covered bond since November 2007 and the first since the Regulated Covered Bond regime came into effect, a 10 year deal that is expected to be at least Eu2bn and at price talk tighter than that heard last week. The deal will hit another frenzied week for covered bonds, with at least two further issues likely in the coming days on top of three today (Monday), and more new names in the pipeline.

Standard & Poor’s downgraded NIBC Bank from BBB+ to BBB yesterday (Thursday) because of an increased likelihood that the bank will report a loss for 2009, with asset quality deteriorating and pressure on net interest income.

ING yesterday (Wednesday) priced a Eu2bn five year covered bond that is the tightest and largest five year or longer benchmark issued outside Germany this year, according to one of the leads.

A series of new issues at aggressive levels in what could be the busiest ever week in the covered bond market has raised fears among investors that the asset class is facing a bubble.

Bilbao Bizkaia Kutxa will this (Tuesday) afternoon price its Eu1bn five year cédulas hipotecarias debut at 58bp over mid-swaps, a “punchy” level that bankers said signalled that pricing expectations might need to be revised tighter. And a tighter level than expected is already being rumoured on the first of several new issues in the pipeline, which includes Dutch, Portuguese and Italian supply.

Moody’s yesterday (Monday) placed ING Bank’s Aa3 long term senior debt rating and C+ bank financial strength rating on review for possible downgrade.

Fortis Bank Nederland is in the final stages of establishing a covered bond programme, and is targeting October for the launch of a Eu2bn issue, an official at the bank told The Cover.

ING Bank NV has been downgraded from AA- to A+ by Standard & Poor’s, reflecting the rating agency’s expectation that the Dutch group will report a loss in 2009 after a relatively weak first half performance.

The Dutch central bank’s register of covered bonds has been updated and includes ABN Amro’s programme alongside that of ING Bank and NIBC Bank.