Global Covered Bond News Roundup - Week Ending July 9

Trouble in Denmark (with Basel III) ... covered bond stalwarts Crédit Agricole and LBBW price new issues, along with a debut from Korea Housing Finance Corp. ... 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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DENMARK

"Denmark's banks, some of the world's biggest issuers of covered bonds, are frantically lobbying European regulators to avert proposed funding rules that threaten the structure of the Danish mortgage market," as reported by the Financial Times.

EUROPE (in general)

"[European Central Bank President Jean-Claude] Trichet suggested the ECB won't extend its covered bond market program now that it has reached the EUR60 billion limit for purchases that it had foreseen a year ago," as noted in the Wall Street Journal (July 8).

FRANCE

• Crédit Agricole SA (July 6) priced a 15-year, €1.25 billion mortgage covered bond at 77 basis points over mid-swaps.

• "Covered bond sales by French banks have surged above Germany's usually dominant market for the first time in the six months to June 30, data provider Dealogic shows," as reported in Dow Jones' Financial News (July 12).

GERMANY

• Landesbank Baden-Wuerttemberg (LBBW) (July 8) priced a three-year, $500 million covered bond at 70 basis points over mid-swaps.

• "In 2013 or 2014, Germany will actively tackle the topic and prepare the privatization" of Hypo Real Estate, according to a source quoted by Reuters (July 6).

HUNGARY

Moody's Investors Service (July 8) affirmed the Baa1 long-term deposit rating and the Prime-2 short-term deposit rating of OTP Mortgage Bank, the wholly owned mortgage-lending subsidiary of OTP Bank, while maintaining a negative outlook on the long-term rating.  Moody's stated that the rating affirmation of OTP Mortgage Bank follows the issuance of a full, irrevocable and unconditional guarantee on all its deposits and senior and covered bond obligations by OTP Bank.  In accordance with the agency's rating approach, a special covered bond issuer can be rated the same as its support provider in the presence of a full guarantee.

KOREA

Korea Housing Finance Corp. (KHFC) (July 9) priced a debut five-year, US $500 million statutory covered bond at 196 basis points over mid-swaps.

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.