Luxembourg

Banca Carige is likely to set the maturity of its debut benchmark covered bond at seven years, according to market participants. Meanwhile, a Spanish name is said to be looking closely at the market with the possibility of an imminent deal and Dexia’s Luxembourg registered arm is aiming to settle some unfinished business.

Fitch on Friday took rating actions on five subsidiaries of Commerzbank, including Eurohypo and its Luxembourg subsidiary, following the European Commission’s conditional approval of Germany’s state aid for Commerzbank.

Fitch last week took rating actions on several major banks following a review of the capacity of high grade sovereigns to support their largest and most systemically important commercial banks. The agency upgraded two German Pfandbrief issuers, but cut the ratings of four entities in the Dexia group.

Fitch on Wednesday affirmed Eurohypo Lux’s outstanding lettres de gage publiques at AAA, following an increase in overcollateralisation to counter mismatches in its cover pool.

Caixanova has finally opened books on its first government-guaranteed issue, albeit at the widest spread yet for a Spanish issue. Meanwhile, Dexia and Lloyds yesterday (Tuesday) set new benchmarks for size in the government-guaranteed asset class.

Dexia Crédit Local today (Tuesday) found its second visit to the government-guaranteed market easier than its first and is set to price its new issue this afternoon. Meanwhile Lloyds TSB found demand from unexpected areas in sterling and OeVAG wrapped up its four year euro.

Dexia Crédit Local is hoping to win over investors to its three-way guaranteed paper when it comes to market tomorrow (Tuesday), while OeVAG has today (Monday) been negotiating the differences in opinion on Austrian spreads.

Fitch on Friday affirmed the ratings of two of Commerzbank’s covered bond-issuing subsidiaries, on stable outlook, but although Standard & Poor’s confirmed their ratings, it left them on negative outlook.

Euro denominated mortgage bonds issued by Danish covered bond institutions through a new Luxembourg-based central securities depositary have been approved as collateral for loans with the European Central Bank.

A new Danish central securities depositary in Luxembourg has made it possible for Danish mortgage institutions to issue covered bonds that are expected to be eligible as collateral with the European Central Bank and therefore more attractive for investors. Realkredit Danmark is from today (Tuesday) following Nykredit in using the new option.

On 15 October the Luxembourg parliament approved the amended lettres de gage law. The move introduces a new asset class backed by movable assets, a higher loan-to-value limit for residential mortgage assets, and a new minimum overcollateralisation level.

Fitch yesterday (Wednesday) affirmed its AAA rating of Dexia Municipal Agency’s obligations foncières. The affirmation comes despite the rating agency’s downgrade of Dexia Crédit Local from AA+ to AA-, with a stable outlook.