UK

Nationwide Building Society priced its first benchmark covered bond in three years yesterday (Tuesday), a Eu1.25bn five year transaction that the issuer said lays a strong foundation for its future activity in the market.

Italy’s UBI Banca is today (Monday) following through with a seven year benchmark covered bond that it postponed in early summer, while the UK’s Nationwide Building Society is preparing to return to the market for the first time in three years and Deutsche Kreditbank has priced a Eu500m five year issue.

La Caixa this (Thursday) morning launched the fourth cédulas in a week, a three year issue that bankers away from the leads said was ambitiously priced, after Banco Sabadell yesterday became the first Spanish issuer to reach a Eu1bn deal size since July. The Spanish covered bond was the only new benchmark in the market this morning, after issuers including CM-CIC and Royal Bank of Scotland wrapped up new issues yesterday.

DnB Nor Boligkreditt is pricing a Eu1.5bn seven year covered bond today (Tuesday) after ING Bank reopened the jumbo market yesterday, while further jumbo, sub-jumbo and roadshow projects are in motion.

Standard & Poor’s yesterday (Monday) withdrew its ratings of Yorkshire Building Society’s covered bond programme after affirming them at AA+ under its revised rating methodology to take into account potentially volatile asset-liability mismatch risk.

Standard & Poor’s has, under its revised rating methodology, downgraded covered bonds issued by Bradford & Bingley from AAA to AA, on stable outlook, because of a high proportion of buy-to-let loans in the cover pool.

Yorkshire Building Society covered bond-holders passed a resolution to remove Standard & Poor’s from the documentation of the issuer’s covered bond programme yesterday (Tuesday).

Yorkshire Building Society is to seek consent from bondholders to drop Standard & Poor’s ratings from its covered bond programme as a result of changes to the rating agency’s swap counterparty criteria.

Eurohypo is today (Wednesday) sizeing a four year Pfandbrief at Eu500m, the lower end of a targeted size range, in response to muted demand in a market where Eu4.25bn of supply has hit the market in a day-and-a-half.

Banca Monte dei Paschi di Siena is taking the place of UBI Banca in reopening the Italian covered bond market, launching its inaugural deal today (Tuesday), but the reopening of the obbligazioni bancarie garantite segment has been badly managed, according to bankers. Meanwhile, four other issues are accessing the market today.

Fitch has affirmed the rating of mortgage-backed covered bonds issued by Barclays Bank at AAA after assigning the programme a worse Discontinuity Factor because it assessed a pre-maturity test incorporated in the programme as weaker than it did before.

Four covered bond issuers were this (Monday) morning said to be lining up to tap the covered bond market, with the level being floated for a mooted Italian transaction surprising market participants.