Rating news

  • Caffil completes French covered downgrade spree

    Fitch completed its round of French covered bond downgrades on Thursday evening, announcing a one notch cut to the rating of Obligations Foncières sold by Caisse Francaise de Financement Local (Caffil). The ratings cuts have come in the wake of Fitch’s decision to downgrade the French sovereign’s rating of AA from AA+.

  • Further French OF downgrades likely from Fitch

    Obligations Fonciére issued by Compagnie de Financement Fonciere and CIF Euromortage were downgraded one notch by Fitch this week following the rating agency’s downgrade of France’s long term rating to AA from AA+.

Market wrap

  • CS to make second attempt at covered bond exchange

    Credit Suisse has extended the voting deadline on an exchange of five series of covered bonds from hard to soft bullets, after failing to attain the necessary quorum of investors in the first round of voting.

Analyst research

  • SSM may be bad for covered bonds

    The European Central Bank is legally obliged to carry out its role as a single supervisor and its responsibility to apply resolution measures will take precedence over its position as a covered bond investor, say analysts at Barclays research. As the central bank has the power to make decisions that could be detrimental to covered bond holders, covered bond supervision should be strengthened.

  • Pfandbrief benchmark supply may rise as market shrinks

    Issuance of benchmark Pfandbriefe is expected to increase slightly next year, but with private placements set to decline more sharply, the overall size of the German covered bond market will shrink, said the German Association of Pfandbriefbanks (VDP).

People moves

  • Rad joins Crédit Agricole

    Allen Rad has joined Crédit Agricole CIB as head of European financials and covered bond trading. He most recently worked at Royal Bank of Scotland.

Secondary market

  • Low TLTRO take up bodes well for covered bonds

    The lower than expected take up of the Targeted Long Term Refinancing Operation is positive for covered bond supply. It should also lead to an expansion in covered bond demand, as the rising probability of a sovereign quantitative easing (QE) programme and resulting sovereign rally improves relative value, especially for peripheral covered bonds. However, political uncertainty in Greece is causing peripheral spread widening.

  • Secondary spreads defy ECB step-up in buying

    The European Central Bank increased its purchases of covered bonds in the secondary market last week as primary activity remained subdued, but the increase has only had a marginal impact on spreads.

Regulatory developments

  • Moody’s applauds IMF’s proposals on Danish mortgage lending

    The International Monetary Fund’s recommendation that Danish banks reduce reliance on short-term funding and limit lending on variable rate, as well as interest-only mortgage loans, is credit positive for Denmark’s credit institutions, said Moody’s on Monday.

  • Harmonisation has to be ambitious, hears VDP conference

    Covered bond harmonisation must be ambitious rather than lowest common denominator, or there is little point in the project, according to a presentation at the Association for Financial Markets in Europe / Verband deutscher Pfandbriefbanken covered bond conference in Berlin.


Deal reviews

  • Cariparma takes consensual approach to pricing

    After a string of lacklustre covered bonds, the primary market found its mojo on Wednesday as Cassa di Risparmio di Parma e Piacenza (Cariparma) issued a larger and longer Obbligazioni Bancarie Garantite than its closest comparable. Despite a weak secondary market, the issuer was able to attract a book that was driven by private sector demand for its first public deal, because pricing was fair and was defined from the start of the bookbuild.

In-depth analysis and interviews

  • ECB changes tack to become a price follower, not a leader

    Cassa di Risparmio di Parma e Piacenza (Cariparma) issued a €1bn seven year covered bond this week that built on private sector demand, rather than relying on the European Central Bank. The deal followed a handful of lacklustre primary covered bonds in which more than half was placed with the ECB, and revitalises a market which had become deeply despondent about the effects of central bank action.

Mandates & deal pipeline

  • Cariparma mandates despite poor conditions

    Cassa di Risparmio di Parma e Piacenza (Cariparma) has mandated leads for its inaugural Obbligazioni Bancarie Garantite, which is set to launch tomorrow following the roadshow which was finalised on Monday.

RMBS primary news

  • RMBS supply picks up despite softer tone

    New issue momentum picked up in the RMBS market this week as one Dutch deal was priced and another was announced, along with a sterling deal from a UK bank. However, pricing softened as euphoria over the ECB’s purchase programme began to wane.

Deals tracker

Priced Deals

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Deals pipeline

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Book runner

Covered bonds €500m+ to May 29  2014

Lead manager Amount
No of Issues Share %
1 BNP Paribas 4.51 20 8.5
2 UniCredit 4.38 29 8.2
3 Natixis 4.09 21 7.7
4 Commerzbank 3.38 21 6.3

 league table builder

All covered bonds to May 29 2014

Lead manager Amount
No of Issues Share %
1 UnCredit 7.60 51 7.9
2 Natixis 7.36 27 7.7
3 BNP Paribas 6.58 23 6.9
4 UBS 5.12 31 5.3

 league table builder