UK

Fitch has today (Monday) affirmed Bank of Ireland’s mortgage covered bonds at AAA after improving their Discontinuity Factor to reflect changes to the issuer’s UK programme that mean all covered bonds executed off it now feature an extendable maturity.

Christoph Anhamm has been promoted to become head of covered bond origination at Royal Bank of Scotland.

Abbey National Treasury Services plc negotiated a shaky spell in the covered bond market to come away with a Eu1.75bn seven year benchmark priced at the tight end of guidance yesterday (Wednesday). Funding officials at the issuer told The Cover that they were “delighted” with the pricing of the transaction.

Abbey overcame the weaker tone the covered bond market has faced since last week by adopting what bankers away from the leads called a cautious approach to pricing this (Wednesday) morning. Meanwhile two debut issuers that were already rumoured to be in the pipeline announced official mandates.

Moody’s yesterday (Tuesday) confirmed the Aaa ratings assigned to Norwich & Peterborough’s covered bonds following a restructuring of the issuer’s programme.

Fitch today (Tuesday) downgraded Chelsea Building Society’s mortgage-backed covered bonds from AAA to A because the issuer has not fulfilled requirements to establish a third party bank account and contingent interest swap counterparty following its short term issuer downgrade, as set out in the programme documentation. Meanwhile, Norwich & Peterborough Building Society has completed a restructuring of its covered bond programme.

Abbey, the Santander subsidiary that is expected to launch a new benchmark this week, is facing a fatigued covered bond market in which several recently priced deals have not performed in the secondary market, syndicate officials said today (Tuesday).

The benchmark covered bond market is set to experience a welcome slowdown this week, with Abbey National the only issuer widely expected to launch a deal as others busy themselves with the preparatory work of meeting with investors.

The UK Financial Services Authority said last week that respondents to a discussion paper on the Turner Review underestimated the risks posed by asset encumbrance, a topic it addressed when changing its policy on covered bond issuance last October. The FSA also discussed the potential for international co-ordination among regulators.

Fitch today (Monday) downgraded Norwich & Peterborough Building Society’s long term issuer default rating from A- to BBB+, on stable outlook. The rating agency affirmed the building society’s mortgage-backed covered bonds at AAA.

Barclays reopened the UK covered bond market with the first issue since October 2007 yesterday (Tuesday) and did so in style, pricing a Eu2bn 10 year issue at a level tighter than many market participants had until then thought possible.

Royal Bank of Scotland is considering joining the ranks of UK covered bond issuers, an official at the bank told The Cover after the registration of RBS Covered Bonds (Holdings) Ltd yesterday (Tuesday).