Global Covered Bond News Roundup - Week Ending July 16

While Bank of Nova Scotia's US $2.5 billion covered bond was making headlines on this side of the Atlantic, Europe's covered bond items were mostly limited to ratings news.

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 (sometimes available without paid subscription only for a limited period of time).  For links to Factiva and some online publications, you may need to have a subscription.

DENMARK

• Fitch Ratings (July 16) affirmed Danske Bank's Long-term Issuer Default rating (IDR) at 'A+' with Stable Outlook and its Individual rating at 'B/C.'  Among other comments, Fitch noted: "International funding markets remain open to the large Nordic banks, and, if necessary, Danske's moderate remaining funding need for 2010 and 2011 can be met with its unutilised covered bond pool."

• Standard & Poor's Ratings Services  (July 9) affirmed and removed from CreditWatch negative its 'AAA' credit ratings on Danske Bank A/S's mortgage covered bonds issued from cover pool D.  At the same time, S&P assigned a stable outlook to these mortgage covered bonds.

EUROPE (in general)

Asset-Backed Alert has a story (July 16) on how "Europe's fiscal woes are propelling covered-bond issuance toward record levels."

ICELAND

Moody's Investors Service announced (July 13) that it has "withdrawn all the ratings of Kaupthing Bank hf (Kaupthing) and its covered bond programme, for business reasons."  The agency stated that the rating action does not reflect a change in the bank's creditworthiness.

IN GENERAL

Moody's (July 15) released its quarterly monitoring overview for covered bonds in EMEA (Europe, Middle East and Asia). The report (available only to paid subscribers) summarizes the most important credit measures contained in Moody's deal-specific Performance Overviews.

KOREA

An article titled "Bankers Debate KHFC Pricing" (July 13) explores the reasons that last week's debut covered bond issue by Korea Housing Finance Corporation (KHFC) priced at a wider level than KHFC probably could have achieved with senior unsecured paper.

PORTUGAL

Standard & Poor's Ratings Services (July 14) lowered to 'A' from 'AAA' and removed from CreditWatch negative its credit rating on Banco BPI S.A.'s public-sector covered bonds (obrigações sobre o sector público). At the same time, the agency assigned a negative outlook to these public-sector covered bonds

SPAIN

Fitch Ratings (July 14) downgraded the mortgage covered bonds (cédulas hipotecarias) of Banco Popular Español to 'AA+' from 'AAA.'  The rating action is a result of the downgrade of the bank's Long-term Issuer Default rating (IDR) to 'A' from 'AA-.'

SWEDEN

Moody's (July 14) affirmed the Baa1 long-term debt and deposit rating and D+ bank financial strength rating (BFSR) of SEB AG —which is wholly owned by Swedish bank SEB — while stating that the outlook on the BFSR remains negative.  The rating action followed SEB's announcement that it plans to sell its German retail banking business to Banco Santander for €555 million following regulatory approval.  Moody's noted that the transaction will gear the bank's funding profile towards market funding, with covered bonds representing almost 20% of total funding.

Information from rating agencies in the entries above is typically adapted from those agencies' media releases.  Rating news items should not be relied upon as a substitute for the full text of rating action announcements.