UK

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.

The Bank of Scotland, a subsidiary of the Lloyds Group, has restructured as many as eight covered bonds in an exercise that could be constituted as a preliminary move ahead of potentially issuing into the public market.

Benchmark covered bond supply in 2011 is likely to be close to 2010 volumes, according to covered bond analysts, with no analysis forecasting more than a Eu20bn rise or fall relative to 2010 levels.

The UK Regulated Covered Bond Council has appointed Chris Fielding to a newly created role of chief industry spokesperson for the council as part of a push to promote UK Regulated Covered Bonds, it announced today (Tuesday).

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.

Jozef Prokeš has joined BlackRock as a portfolio manager to help boost the investment management firm’s covered bond focus.

Anglo Irish Bank Corp Limited yesterday (Tuesday) launched a buyback offer aimed at all remaining outstanding external covered bonds launched under a UK programme, an operation that an official at the issuer described as a “clean-up exercise”.

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.

The UK’s Financial Services Authority is delaying phasing in liquidity requirements for larger UK banks pending finalisation of rules being developed by the Basel Committee of Banking Supervisors. The move has been interpreted as a sign that the FSA could broaden the range of assets deemed eligible for liquidity buffers, towards which covered bonds currently do not count.

Moody’s today (Thursday) affirmed mortgage covered bonds issued by Northern Rock Asset Management at Aaa and removed them from review for possible downgrade, where they were placed in 2007.

In brief: Lloyds TSB Bank has become the third UK issuer to announce that it has amended a covered bond programme to allow for the issuance of registered covered bonds.

Euro benchmark covered bond supply slowed to a lone tap from Bayerische Landesbank today (Wednesday), although the pipeline of roadshows grew with the addition of a mandate from the UK’s Clydesdale Bank. Nordea Bank Finland yesterday priced a Eu2bn five year inaugural deal that appears to be the biggest Finnish benchmark covered bond ever.