UK

Alliance & Leicester has set up Alliance & Leicester Covered Bonds (LM) Ltd, prompting speculation that it is getting closer to launching its long awaited covered bond programme.

Bradford & Bingley is believed to have raised £500m of two year funding only days after fellow UK bank Northern Rock was forced to turn to the Bank of England to secure an emergency credit line.

Last night’s news that Northern Rock had arranged emergency funding from the Bank of England led to a standstill in UK covered bonds this (Friday) morning.

UK covered bonds were hammered in trading this (Tuesday) morning, even if market-making was said to be more consistent than on Monday, when many dealers were not quoting prices.

Nationwide Building Society’s Eu1bn five year covered bond came in for criticism after launch. Here, Justin Fox, head of treasury markets at Nationwide, gives his response.

HBOS’s decision to be the first to test the market early this week looked even more astute today as the market continued to reprice.

Since HBOS blazed the trail in 2003, the structured covered bond has spread to other jurisdictions, including Germany, where Landesbank Berlin is attempting to launch the first non-Pfandbrief German covered bond. But is this development good for the long term health of the market? Philip Moore reports.

Nationwide’s attempt to build on HBOS’s successful reopening of the covered bond market backfired yesterday (Wednesday) when its haste to issue caused a renewed crisis of confidence in the primary market.