Global Covered Bond News Roundup - Week Ending June 25

One Italian bank's covered bond pricing reportedly prompts postponement by another ... Bayerische Landesbank, HSH Nordbank and Banco Santander's Abbey launch ... National Bank of Greece sets up another CB program ... 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 (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.

EUROPE (in general)

• Gabi Thesing of Bloomberg (June 24) wrote a story quoting various economists to the effect that the "European Central Bank [ECB] should continue buying covered bonds after the official purchase program ends next week, extending its lifeline to Europe's banks."

• In a research note, RBS Marketplace analysts wrote that "[f]urther purchases of covered bonds beyond the expiry of the [ECB's] existing purchase program (at the end of this month), either through the securities markets program or an extension of the covered bond purchase program, looks the most likely next policy step" in the ECB's ongoing efforts to provide liquidity in the euro area.

FRANCE

• Moody's Investors Service (June 25) assigned a provisional long-term rating of (P)Aaa to Series 5 of the covered bonds to be issued by FCT Red and Black - Guaranteed Home Loans under the terms of a €25 billion Covered Bonds program.   On June 23, Moody's assigned a long-term rating of Aaa to the covered bonds issued under the program.

• Fitch Ratings (June 24) affirmed the covered bonds issued by BNP Paribas Home Loans Covered Bonds (BNPP CB) and the obligations foncieres (OF) issued by BNP Paribas Public-Sector SCF (BNP SCF) at 'AAA'. Fitch noted that the rating action followed the downgrades of BNP Paribas and BNP SCF to 'AA-' from 'AA' on June 21, 2010.

GERMANY

• Bayerische Landesbank  (June 22) priced a four-year, €1 billion covered bond at 7 basis points over mid-swaps.

• HSH Nordbank (June 23) priced a three-year, €500 million public sector covered bond.

• Fitch Ratings (June 21) affirmed Corealcredit Bank AG's mortgage covered bonds at 'AA-' and simultaneously removed them from Rating Watch Negative (RWN).  The affirmation concluded Fitch's review of the credit risk of the cover pool and the cash flow mismatches between the assets and the liabilities of the program. The agency had placed the covered bonds on RWN on concern over their exposure to the commercial real estate of the cover pool due to the downturn of this market throughout Europe.

GREECE

National Bank of Greece S.A. (NBG) (June 24) announced that it has established a second, €15 billion mortgage-backed covered bond program for liquidity purposes.   Moody's Investors Service (June 24) assigned definitive long-term ratings of Baa (new ratings) to the following series of covered bonds issued by National Bank of Greece S.A. (NBG) under its second covered bond program: Series 1 Covered Bonds due 2015; Baa3; Series 2 Covered Bonds due 2017; and Series 3 Covered Bonds due 2019.

ITALY

• Banca Monte dei Paschi di Siena (Banca MPS) (June 22) priced a five-year, €1 billion residential mortgage covered bond at 105 basis points over mid-swaps.

• UBI Banca SpA (June 22) postponed a planned seven-year, €1+ billion covered bond in the wake of pricing for a five-year CB by Banca MPS.

NETHERLANDS

• Fitch Ratings (June 25) assigned Achmea Hypotheekbank N.V.'s six series of mortgage covered bonds equalling €4.2 billion issued under its €10 billion mortgage covered bond program a 'AAA' rating. Fitch noted that the bonds are soft bullet issuances that benefit from an extended maturity date of one year following the expected maturity date of each issue.

• Moody's Investors Service (June 21) affirmed that certain changes to the transaction documents for the €15 billion Covered Bond Program of SNS Bank N.V. (SNS), in and of themselves, do not at this time result in a reduction or withdrawal of the current Aaa rating of the covered bonds issued by SNS under the program.  Moody's noted that the principal amendment is the provision for creation of a liquidity reserve.

NORWAY

Moody's Investors Service (June 25) affirmed that the changes to the prospectus for the covered bond program of Storebrand Boligkreditt AS, in and of themselves, do not result in a reduction or withdrawal of the current Aaa rating of the mortgage covered bonds issued by Storebrand Boligkreditt AS.

SPAIN

Moody's Investors Service (June 21) assigned definitive ratings of Aaa to the three-year, €4.5 billion Series A issued by Cédulas TdA 19, Fondo de Titulización de Activos.  According to Moody's, this transaction is a repeat TdA issuance of Spanish multi-issuer covered bonds through the establishment of a new closed Fund in accordance with the Spanish Securitization Law. The transaction represents the repackaging of a portfolio of mortgage covered bonds (Cédulas Hipotecarias) issued by three Spanish financial entities (the issuers). It is backed by a pool of Cédulas Hipotecarias issued by: Banco Popular Español S.A. (€1.5 billion), Bankinter (€1.5 billion) and Caja Madrid (€1.5 billion).

SWEDEN

Moody's Investors Service (June 24) affirmed that the changes to the prospectus for the €15 billion Medium Term Note and Covered Bond Program of Nordea Hypotek AB (publ), in and of themselves, do not at this time result in a reduction or withdrawal of the current Aaa rating of the covered bonds issued by Nordea Hypotek under the program.

UNITED KINGDOM

• Lloyds TSB Bank PLC (June 25) announced that "GBP650,000,000 of the GBP2,000,000,000 Series 2009-1 Floating Rate Covered Bonds due 2018 (ISIN Code: XS0425766200) issued pursuant to Lloyds TSB Bank plc's GBP30 billion Global Covered Bond Programme have been cancelled."

• Banco Santander's UK unit, Abbey PLC, (June 22) priced a four-year, €750 million covered bond at 135 basis points over mid-swaps.

• Fitch Ratings (June 22) has assigned the Royal Bank of Scotland plc's Series 1 mortgage covered bonds a 'AAA' rating, noting that the €1.25 billion soft bullet issuance benefits from an extended maturity date of one year following its expected maturity date of June 2013. At the same time, the agency withdrew the issuer's expected program rating of 'AAA'.  Fitch stated that going forward, it will assign and maintain ratings on the basis of each issuance from the program, rather than on the program itself.

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.