UK

Abbey National Treasury Services today (Monday) launched a seven year covered bond that is the euro benchmark market’s first new issue since fellow UK issuer Lloyds TSB Bank sold a Eu2bn 10 year deal last Wednesday. Meanwhile, Banco Popular Español has completed an exchange offer and the first jumbo Pfandbrief since June is being prepared.

Lloyds TSB Bank is understood to have attracted more than Eu3bn of demand for a 10 year covered bond this (Wednesday) morning, demonstrating strong support for the long end and UK names. The issue comes after SNS Bank sold a Eu1bn 10 year yesterday (Tuesday), with the issuer citing yield levels as a key factor in its execution.

Yorkshire Building Society launched its first benchmark covered bond since 2007 yesterday (Tuesday), a Eu600m five year Regulated Covered Bond that built on improving sentiment towards the UK, according to the issuer.

Five issuers piled into the euro covered bond market in one of its busiest ever sessions this (Tuesday) morning to take advantage of supportive conditions. Supply included the first deals in a maturity longer than 10 years since June.

At least three issuers are understood to be preparing to launch sizeable new covered bonds this week despite no deals being live on the first morning of a working week for the first time since the benchmark market reopened in August. Meanwhile, Dexia has announced spreads on three new benchmarks it is offering as part of an exchange.

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).