The Netherlands

The week’s activity has started slowly today (Monday), with no concrete deals in the market, although NIBC has mandated its second government-guaranteed deal and is expected soon. Meanwhile covered bond market participants are still digesting the reopening of jumbo Pfandbriefe last week.

Fitch has updated its model for rating Dutch residential mortgage-backed transactions, and proposed changes to its methodology for German residential mortgage-backed transactions that assume sharper falls in value in the event of a forced sale.

Standard & Poor’s yesterday (Thursday) affirmed its AAA rating of Achmea Hypotheekbank’s covered bonds after the Dutch bank took remedial action necessitated by changes to the rating agency’s counterparty methodology.

ING’s release of preliminary results for the fourth quarter of 2008 prompted Moody’s and Fitch to yesterday (Wednesday) downgrade the Dutch bank’s credit rating.

The government guaranteed bank debt market was the juncture of two waves of negative sentiment in the markets this week, as downgrades hit the sovereign market and financial institutions suffered renewed pressure.

Moody’s today (Thursday) downgraded SNS Bank’s rating from A1 to A2 and changed the outlook from negative to stable.

Caixa Geral de Depósitos and LeasePlan are pricing the first government guaranteed deals from Portugal and the Netherlands, respectively, this (Friday) afternoon. However, the first guaranteed deal from Germany, for HSH Nordbank, is not expected to be rushed to market.

Achmea Hypotheekbank and NIBC have taken sufficient action to avoid having their covered bonds placed on CreditWatch negative by Standard & Poor’s, after the rating agency revised its stance on derivative counterparties.

Anyone worried about deteriorating asset quality and the state of European mortgage markets would have felt their spirits lifting during the opening panel of the European Mortgage Federation’s sixth annual conference in Brussels yesterday (Thursday). Representatives from Denmark, Poland, the Netherlands, Germany and Belgium painted a reassuring picture of the state of their country’s mortgage markets.

Achmea Hypotheekbank and NIBC are working on ways to address revisions to Standard & Poor’s rating methodology that put a cap of AA on issues involving A-2 rated derivative counterparties.

NIBC Bank has completed the transfer of German residential loans to its cover pool, which led Fitch to affirm the Dutch bank’s covered bonds at AAA today (Wednesday). [Story corrected to reflect completion of transfer.]

In brief: ING and Crédit Mutuel group members were downgraded this week, but the only covered bonds to have been cut so far this week have been those of Ukraine’s Bank Khreschatyk.