Weekly Global Roundup (June 19)

Possible Unicredit long-term issuance ... a reported decision by South Korea's housing agency in favor of CBs ... 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.  Here is this week's roundup, linked to various online sources.

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.

EUROPE (in general)

Lyxor ETF EuroMTS Covered Bond Aggregate (ECB.FR) dropped to €100.06 (USD $139.26) at one point during the trading day Thursday (June 18)—a 52-week low.  It closed at €109.05 (USD $152.40).

FRANCE

The €2 billion (about USD $2.8 billion) issue of obligations foncières (French legislative covered bonds) due December 19, 2014, issued by CIF Euromortgage (the Société de Crédit Foncier of Credit Immobilier de France group) was assigned a definitive Aaa rating by Moody's Investors Service today (June 19).  Moody's noted that this is the series 49 issue of obligations foncières under CIF Euromortgage's € 25 billion (USD $34.96 billion) covered bond program.

GERMANY

• The public-sector covered bonds originally issued by Deutsche Siedlungs und Landesrentenbank (prior to its transformation to a stock corporation) were assigned Aaa ratings by Moody's Investors Service Thursday (June 18).

• Moody's Investors Service announced Monday (June 15) that it is continuing its review of the Aaa rated Mortgage Covered Bonds (Hypothekenpfandbrief) and the Aaa rated Public-Sector Covered Bonds (Öffentlicher Pfandbrief) issued by SEB AG. According the to rating agency, maintenance of the Aaa ratings is expected to depend on whether the covered bonds will be supported by the Swedish parent entity, SEB AB.

IRELAND

The Anglo Irish Bank Corporation's €1.25 billion (USD $1.73 billion) covered bonds new series 12, with an extended final maturity of February 2012, received a 'AAA' rating from Fitch Ratings Monday (June 15). The cover pool consists of mortgage loans backed by commercial real estate in England and Scotland, as well as cash collateral.   At the same time, Fitch affirmed all the other rated outstanding covered bonds of the bank at 'AAA.'

ITALY

• According to a source cited by Reuters Thursday (June 18), UniCreditwould like to launch a covered bond issue with a maturity of between five and ten years.

• Moody's Investors Service Thursday (June 18) took the following rating actions:  (1) placed on review for possible downgrade the bank financial strength ratings (BFSRs) or long-term debt and deposit ratings of 21 Italian banks and financial institutions; (2) affirmed the BFSRs and long-term deposit and debt ratings of 20 Italian banks; and (3) placed the long-term deposit ratings of two banks on review for possible upgrade.  Moody's rates a total of 47 financial institutions in Italy. The rating agency said that in most cases there would be only a limited impact, with most downgrades being limited to a single notch. The press release noted that it does not deal with possible implications for the covered bond ratings of Italian banks.

SOUTH KOREA

According to reports Monday (June 15), South Korea's mortgage agency—Korea Housing Finance—is planning a first-ever covered-bond offering in preference to residential mortgage-backed securities as a means of financing.

SPAIN

Moody's Investors Service Tuesday (June 16) downgraded the ratings of two programs for cédulas hipotecarias (Spanish legislative mortgage covered bonds): Caja Insular de Ahorros de Canarias (downgraded to Aa1 from Aaa on review for downgrade) and Caja de Ahorros Municipal de Burgos (downgraded to Aa1 on review for possible downgrade from Aaa on review for downgrade).  At the same time,  Moody's downgraded the ratings of two programs for cédulas territoriales (Spanish legislative public sector covered bonds): Caja de Ahorros de Castilla La Mancha (downgraded to Aa3 from Aa1 on review for downgrade) and Dexia Sabadell, S.A (downgraded to Aa2 from Aa1 on review for downgrade). Also, the agency confirmed the Aaa ratings of three cédulas territoriales programs.  Moody's stated that it was continuing its review for possible downgrade of a number of other covered bond programs, including 59 series of Spanish covered bonds issued under multi-issuer programs.

SWEDEN

Fitch Ratings Tuesday (June 16) affirmed Svenska Handelsbanken's Long-term Issuer Default Rating (IDR) at 'AA-' along with several other of the institution's ratings.  Among other things, the agency noted: "Over the past two years, despite global financial turmoil, Handelsbanken has had no problem accessing the markets and has tapped the senior debt and covered bond markets." (Italics added.)

SWITZERLAND

Actions taken by the Swiss National Bank (SNB) during these difficult times to help protect the Swiss economy include (1) buying covered bonds in the amount of 2.5 billion Swiss francs and (2) arranging three covered bond deals with Swiss regional banks aid in boosting the liquidity of UBS and Credit Suisse—as noted in a summary conveyed by Reuters Thursday (June 18).