UK

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.

Lloyds TSB Bank yesterday (Wednesday) extended the maturity profile of its Regulated Covered Bond programme with a Eu750m eight year issue that offered insurance company accounts a sought-after 4% coupon, an official at the issuer told The Cover.

New covered bonds launched by Danske Bank, Lloyds TSB and SpareBank 1 Boligkreditt met with modest demand today (Wednesday), although syndicate bankers highlighted high quality order books and sub-Eu1bn issue sizes in longer maturities as respectable achievements.

Five new Eu500m plus covered bonds were announced in the past 24 hours after yesterday (Monday) morning’s two, despite market conditions proving worse than last week, when 12 hit the market. The deals announced today (Tuesday) are set to take euro jumbo issuance this year past Eu100bn.

Fitch said today (Monday) that it expects forthcoming changes to deposit protection in the UK to mitigate set-off exposure in UK structured finance transactions and covered bond programmes.

Royal Bank of Scotland's debut covered bond, as seen through the bottom of EuroWeek cartoonist Olly Copplestone's whisky tumbler.

At least two banks have mandated for covered bonds that are expected next week, after supply this week of Eu10.7bn.

Royal Bank of Scotland braved a volatile market to launch its first benchmark covered bond and the first UK deal for almost three months yesterday (Wednesday), and the issuer told The Cover that it was thrilled to have been able to debut successfully in such challenging conditions.