Portugal

Santander Totta priced its debut covered bond this (Wednesday) morning, a Eu1bn three deal that was regarded as correctly pitched in terms of pricing, and reinforced the stability of re-offer levels in the primary market. (Updated to include issuer feedback.)

Portugal’s Santander Totta opened books this (Tuesday) morning on its debut covered bond, a Eu1bn three year deal. The manner of its execution stands in marked contrast to the new issues of the last fortnight, but the tactic appeared to have paid off with the deal fully covered by midday in London.

A new issue from Banco Santander Totta as early as tomorrow (Tuesday), after today’s continental European holiday, could provide further clues as to whether the widening trend in the primary market evident since last September has finally come to an end.

Moody’s today (Tuesday) assigned a provisional triple-A rating to Banco Santander Totta’s covered bond programme. BNP Paribas, Morgan Stanley and UniCredit were mandated as leads back in December, but one banker suggested that first issue could emerge soon.

Portugal’s Millennium BCP’s new Eu1bn two year covered bond may have caused consternation when it was priced at 40bp over mid-swaps yesterday (Thursday), but the lead managers staunchly stuck by their guns to defend the level it came at, and some outside the deal were coming round to their point of view this (Friday) morning.

The books were this (Thursday) morning opened on Millennium BCP’s long awaited covered bond and rapidly filled. However, some market participants said that the exercise reminded them of Banco Espiríto Santo’s Eu1.25bn three year debut in January, which sparked a repricing of the secondary market.

The disarray in the primary market this week has not deterred issuers old and new from pushing on with their covered bond plans. DnB Nor has picked leads for a new benchmark and Banco BPI has announced the arrangers of its programme and scheduled a roadshow.

Canadian Imperial Bank of Commerce plans to roadshow a new covered bond programme early in the second quarter, following in the footsteps of not only those officially in the pipeline, but a variety of other issuers who have been visiting investors but adopting a lower profile.

The covered bond market endured a rocky morning today, with spreads widening alongside heavy falls in equities, giving the European Covered Bond Council further food for thought ahead of its meetings in Milan later this week. But Germany could once again prove the exception in the primary market.

Sweden’s Nordea Hypotek AB is to return to the covered bond market, having mandated BNP Paribas, HSBC, Nordea Markets and UniCredit as lead managers for a new euro denominated benchmark from it Eu10bn covered bond programme. Two Portuguese issuers are gearing up for their scheduled roadshows, with the mortgage pipeline showing signs of getting moving again.

Millennium BCP has mandated Barclays Capital, Deutsche Bank, Millennium Investment Banking and Natixis for a jumbo issue to be launched after a roadshow. Meanwhile OTP Mortgage Bank is sounding out the market for a two year deal through ABN Amro and Deutsche Bank at 60bp-65bp over mid-swaps.

Portugal’s Caixa Geral de Depósitos (CGD) has mandated ABN Amro, Caixa-Banco de Investimento, Dresdner Kleinwort and Natixis as bookrunners for a benchmark sized covered bond.