Covered Bond Roundup - Week Ending January 15

Despite new covered bond issues from France, Germany, the Netherlands, Norway, Portugal, Spain and Switzerland, some observers pointed to weaker investor demand in the wake of last week's abundance - as evidenced by Abbey National's decision to delay a planned launch.

Some items of covered bond news do not rate their own story in this publication — often because they relate to geographic areas outside our focus, North America.  Even so, readers who want to keep up with covered bond news in general might find them interesting.

Note:  For links to a rating agency site, you will need to log in (free) at the site before clicking the link.  For links to Factiva and some online publications, you may need to have a subscription.

EUROPE (in general)

• According to Dow Jones Newswires, covered bonds totaling €15 billion were issued Jan. 4 - 14.  According to Dealogic as cited in the Wall Street Journal, as of Jan. 11 nearly USD $17 billion in covered bonds had been sold in 2010, compared to a total of $292 billion sold in all of 2009.

• As shown by its latest monthly report (issued Jan. 14), in December 2009 the European Central Bank's (ECB's) purchases of covered bonds under its €60 billion purchase program occurred mostly on the secondary market.

FRANCE

• HSBC Covered Bonds (France) (Jan. 13) priced a €1.5 billion French covered bond issue with a seven-year maturity at 40 basis points over mid-swaps.

• Compagnie de Financement Foncier (a subsidiary of Credit Foncier de France) (Jan. 12) priced a €2 billion covered bond with a three-year maturity at 24 basis points over mid-swaps.

• The European Central Bank (ECB) (Jan. 11) approved a plan that would create a new category of French legislative covered bond.

• Fitch Ratings (Jan. 12) assigned BNP Paribas Home Loan Covered Bonds' €1.5 billion seven-year mortgage covered bonds a 'AAA' rating.  Simultaneously, the agency affirmed the ratings of all BNPP CB's other €18.43 billion outstanding covered bonds at 'AAA'.

GERMANY

Deutsche Pfandbriefbank (Jan. 11) priced a €1 billion covered bond with a seven-year maturity at 38 basis points over mid-swaps.

NETHERLANDS

ING Bank NV (Jan. 12) priced a €1.24 billion, ten-year covered bond at 60 basis points over mid-swaps.

NORWAY

DnB NOR Boligkredit (a unit of DnB NOR ASA) (Jan. 11) priced a €1.5 billion covered bond with a seven-year maturity at 39 basis points over mid-swaps.

PORTUGAL

Caixa Geral de Depositos S.A. (Jan. 14) priced a €1 billion, ten-year covered bond issue at 80 basis points over mid-swaps.

SOUTH KOREA

Government authorities reportedly have launched an investigation into KB Financial Group Inc.  According to the Jan. 14 report from Xinhua, "[t]he investigation is aimed at checking whether the group's investment on Bank Center Credit in Kazakhstan, which led into a loss, and issuance of covered bonds worth 1 billion U.S. dollars in May were in breach of financial market regulations" (italics added). KB Financial Group's business units include Kookmin Bank.

SPAIN

Banc Sabadell (Jan. 12) priced a €1 billion issue of cédulas hipotecarias (mortgage coered bonds) with a four-year maturity at 68 basis points over mid-swaps.

SWITZERLAND

UBS AG (Jan. 13) priced a €1.5 billion covered bond with a three-year maturity at 28 basis points over mid-swaps.

UNITED KINGDOM

• According to reports Jan. 14, Abbey National delayed a planned issue of covered bonds for pricing reasons, reflecting greater weakness in investor demand.  Bloomberg quoted a bond analyst as saying, "Following the big wave of issuance [earlier in January], some investors need to take a breather."

• Fitch Ratings (Jan. 14) assigned Barclays Bank plc's Series 2010-1 issue of €1.5 billion mortgage covered bonds a final 'AAA' rating.

• Correcting what Standard & Poor's called an administrative error in an earlier announcement (Dec. 16, 2009), the credit agency (Jan. 8) ended a "CreditWatch negative" on Barclays Bank Plc's £3.054 billion covered bond issuance.

Information from rating agencies in the entries above is typically adapted from those agencies' media releases.