Covered Bond Roundup - Week Ending January 8

New issues from France, Germany, Portugal, Spain, Sweden and the UK ... an award for HSBC ... 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.

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.

AUSTRALIA

In the context of a story on how redemptions of government-guaranteed debt will create a need for more local corporate debt issuance this year, The Australian brings up the push to allow issuance of covered bonds in Australia.

EUROPE (in general)

A Financial News story (Jan. 4) on "the great transparency debate" quotes Bertrand Huet, managing director of the European Policy Committee, Association for Financial Markets in Europe, as writing: "By far the biggest red herring is the belief ... that immediate trade price transparency would better enable market participants and regulators to withstand future crises.  While regulators need (and often already have) access to post-trade price information to monitor markets, the crisis hit and led to liquidity contraction in sectors that were very transparent, such as the government bond, covered bond, futures, or indeed equities markets" (italics added).

FRANCE

• CM-CIC (Jan. 7) priced a €1.5 billion covered bond with a five-year maturity.  Initial guidance was at about 40 basis points over mid-swaps, tightening to 38 basis points over mid-swaps.

• BNP Paribas Home Loan Covered Bonds (Jan. 5) priced a €1.5 billion covered bond with a seven-year maturity at 30 basis points over mid-swaps.

GERMANY

• Dexia Kommunalbank Deutschland AG (Jan. 5) priced a €1.25 billion covered bond with a seven-year maturity at 27 basis points over mid-swaps.  An article in Investment International (Jan. 5) expressed a view that "Dexia appears [a] sound bond investment."

• According to The Irish Times (Jan. 2), "German lawyers investigating the near-collapse of the Hypo Real Estate (HRE) group are considering legal action against former board members of its Dublin-based subsidiary, Depfa plc."

PORTUGAL

Banco BPI SA (Jan. 7) priced a €1 billion covered bond with a five-year maturity at 62 basis points over midswaps.

SPAIN

Banco Bilbao Vizcaya Argentaria SA (BBVA) (Jan. 7) priced a €2 billion issuance of cédulas hipotecarias (mortgage covered bonds) with a seven-year maturity at 55 basis points over mid-swaps.  According to BBVA, this was the largest issue by a Spanish financial entity in the past 18 months.

SWEDEN

Nordea (Jan. 7) priced a €1.5 billion covered bond with a seven-year maturity.  Initial guidance was at about 40 basis points over mid-swaps,  tightening to 39 basis points over mid-swaps.

UNITED KINGDOM

• Barclays (Jan. 7) priced a €1.5 billion regulated covered bond with a five-year maturity.  Guidance was at 45 basis points over mid-swaps.

• Finance Asia (Jan. 4) named HSBC as "Best International Bond House."  In giving the award for performance in 2009, the publication noted (among other things): "HSBC executed structures that were new to the [Asian] region, such as the first Asian government-guaranteed bond for Hana Bank, the first Asia-Pacific covered bond - a $1 billion transaction for Kookmin Bank - and a debut U.S. dollar sukuk for Indonesia"(italics added).

• David Potter, operations director at the Royal Institution of Chartered Surveyors (RICS), included the following in his government policy wish list for 2010: "Tackling mortgage liquidity through the issue of new mortgage-backed securit[ies] and covered bonds to give investors the confidence to return to the market" (italics added).

• At the issuer's request, Moody's Investors Service (Jan. 5) withdrew its previously assigned Aaa rating on the GBP2000M Series 2 covered bonds issued by Alliance & Leicester plc.  According to Moody's, the issuer confirmed that all covered bonds have been repaid in full.

• Upon legal and capital restructuring (completed Jan. 1), Northern Rock was renamed Northern Rock (Asset Management) plc.  Although the company (in temporary public ownership) will not undertake any new mortgage lending, its portfolio includes the Northern Rock covered bond program (which totals about £38 billion).

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