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Covered Bonds Roundtable 2009

It has been a remarkable year for the covered bond asset class. The record number of new issuers that have entered this market is particularly striking. So is the record widening of spreads, later culminating in an equally dramatic tightening after the ECB waved its magic wand. The prospect of new jurisdictions creating covered bonds markets, or the reintroduction of so-called fallen angels, which in some cases have been in exile for a number of years, sets the scene for an exciting 2010. It is easy to forget, however, that since IFR held its...Read more

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Covered Bonds Roundtable 2009 - Part I

IFR: Last time we had a covered bond roundtable there was a very negative outlook in general terms for issuance, which arguably extended to other sectors of the market as well. There was certainly a point last year when covered bonds just were not being issued for a long period of time. Anders, you're an issuer: how did you see the ECB intervention and how did it help you reformulate your covered bond programme? Anders Kvist, SEB: SEB was one of the first issuers to try and issue in the first quarter of this year when the markets were still...

Covered Bonds Roundtable 2009: Participants

Fernando Cuesta - Caja Madrid Fernando Cuesta was made head of funding at Caja Madrid in 2000. He is responsible for all the banks’ funding, including senior, unsecured, Cedulas Hipotecarias, Cedulas Territoriales and bank capital funding including subordinated debt and preference shares. Paul Guire - ICAP Paul Guire is head of ICAP’s office in Frankfurt, where his main responsibilities lie in promoting the securities operations in Europe. He joined ICAP in 1979 and has remained with the group since that time, heading various desks including...

Covered Bonds Roundtable 2009 - Part II

IFR: What's the rating agencies' view on this? We have seen a shift from an almost exclusively Triple A market towards more Double A rated covered bonds? Alessandro Settepani, Fitch: We implicitly said we viewed this as a credit product. That's our job. It is true that there has been a proliferation of jurisdictions issuing so the analysis of the legal framework and the credit analysis of the cover pool is very important. We want to facilitate a comparison among the different issuers within one country, and across the different countries....

Covered Bonds Roundtable 2009 - Part III

IFR: Is there a change in strategy in terms of how you bring a primary deal to the market now? Cuesta: I don't think so. Mortgage lending is growing less than 2%, in some cases 0%, in Spain. Our funding target is basically to refinance what it's maturing. Kvist: Which is not a lot. Cuesta: Which is not a lot. Things could have been tougher in Spain but we tended to issue 10 years, 15, 20 and even 30 years. So we just have at most €2bn–€3bn for the big issuers in maturities every year, which is not a lot. I have been discussing with...