Covered Bond Roundup - Week Ending January 29

Issuance in Austria, France and Germany ... a "scramble for cash" aiding investor's market  ... a downgrade under S&P's revised methodology ... and more.

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.

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AUSTRIA

Vorarlberger Landes AndHypothekenbank AG (Jan. 27) priced a 150 million Swiss franc public sector covered bond with a four-year maturity.

EUROPE (in general)

• A Reuters article by Jane Merriman (Jan. 27) described a "scramble for cash" among European banks to refinance debt over the next three years, which has "many banks lining to up issue covered bonds or senior bonds."  Predictions are for an investor's market and a squeeze on second-tier financial institutions.

• In a Seeking Alpha post (Jan. 29), Jim Delaney wrote: "The move by Europeans away from bank loans and towards corporate debt continues as well this year[,] as before the second full week was in the books there had been $17 [billion] of 'covered bonds' issued by banks across the pond" (italics added).

• Covered bond issuance so far this year reached about €28 billion as of Jan. 29, according to Barclay's Capital as reported by Reuters.

• In an article on the Basel Committee's proposed banking rule reforms, a Reuters article notes that the committee has not yet decided whether assets such as corporate or covered bonds will be included in a new liquidity coverage ratio.

FINLAND

Aktia Real Estate Mortgage Bank is planning to issue a euro-denominated covered bond, according to a report Jan. 25.

FRANCE

• Groupe Caisses d'Epargne (GCE) (Jan. 26) priced a €1.25 billion covered bond with a three-year maturity at 28 basis points over mid-swaps.

• Following the application of its revised criteria for assessing asset-liability mismatch risk in covered bonds, Standard & Poor's Ratings Services (Jan. 28) affirmed and removed from CreditWatch negative its 'AAA' credit  ratings on two covered bond programs: GCE Covered Bonds Programme and Société Générale SCF. At the same time, the rating agency assigned stable outlooks to the covered bonds issued under these programs. 

• Moody's Investors Service (Jan. 29) assigned a long-term, published, monitored, definitive rating of Aaa to the €1.5 billion Fixed Rate Covered Bonds due January 2017 issued by HSBC Covered Bonds (France) under the €8 billion Covered Bond Programme. 

GERMANY

• Aareal Bank AG (Jan. 25) priced a €500 million covered bond with a five-year maturity at 51.3 basis points over the 3.75% Jan. 2015 bundisobligation.

• Deutche Bank has signed a letter of intent regarding development of a new "core banking system" to include "solutions" for analytical banking (including covered bonds), according to an announcement from SAP AG (Jan. 27).

• Car-parts and appliance supplier Bosch "has no large bank loans and issued €1.8bn in bonds and covered bonds last year to bolster its €8 [billion] net liquidity," according to a Financial Times article (Jan. 28)

ITALY

• Intesa Sanpaolo SpA is considering a €3 billion euro ($4.23 billion) issuance under its covered bond program, according to a report Jan. 26.

• Banco Populare plans to issue a €5 billion covered bond, with a roadshow scheduled to start Feb. 1, according to a report Jan 25.

NETHERLANDS

Following the application of its revised criteria for assessing asset-liability mismatch risk in covered bonds, Standard & Poor's Ratings Services  (Jan. 28): (1) lowered to 'AA' from 'AAA' and removed from CreditWatch negative its credit ratings on NIBC Bank N.V. Covered Bond Programme and any series of  bonds it has issued; (2) assigned a negative outlook to  the covered bonds issued under this program; and (3) withdrew its ratings on NIBC's covered bond program and all  series under it at the issuing bank's request.

SWEDEN

• Swedish Covered Bond Corp. (Jan. 27) priced a €1 billion covered bond with a five-year maturity at 47 basis points over mid-swaps.

• Swedbank (Jan. 28) priced a 250 million Swiss Franc covered bond with a six-year maturity.

UNITED KINGDOM

After a non-deal roadshow in cities including Amsterdam, Paris and London, Lloyd's Banking Group reportedly is thinking about euros as the denomination of its planned debut covered bond issue.

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