Portugal

Banco Espírito Santo priced its first covered bond yesterday at 20bp over mid-swaps. The Eu1.25bn three year mortgage backed deal received orders of almost Eu1.9bn, demonstrating the robust nature of the primary market and enjoying a strong secondary performance.

Banco Espirito Santo (BES) has mandated Barclays Capital, BES, Calyon and Deutsche Bank for its new Portuguese mortgage backed covered bond.

Portugal’s Banco Santander Totta has mandated Morgan Stanley to arrange its covered bond programme, and BNP Paribas, Morgan Stanley and UniCredit to lead manage its inaugural issue. The bank joins Banco Espírito Santo and Caixa Económica Montepio Geral in the pipeline for what should be a busy Portuguese sector next year.

Banco Espírito Santo will launch its inaugural Portuguese covered bond benchmark after a European roadshow, having announced Barclays Capital, Calyon, Espírito Santo Investment and programme arranger Deutsche Bank as bookrunners today (Tuesday).

Fitch Ratings delivered an optimistic assessment of the performance of the leading Portugese banks in the first half of 2007. The report, published on Friday, expects the banks to maintain this strong performance despite recent difficult market conditions.

Millennium BCP has finally priced its Eu1bn seven year Portuguese covered bond at 11bp over mid-swaps, the middle of spread guidance.

Millennium BCP will close the books for its Eu1bn seven year issue at the end of today (Tuesday) and price it tomorrow after what is being seen as a slow bookbuilding process.

Millennium BCP’s latest covered bond looked in good shape this morning given that the Portuguese bank has limited the size of its seven year issue to Eu1bn.

Millennium BCP will be reminding investors of Portugal’s recently introduced covered bond legislation and the country’s modest house price growth when it embarks on a roadshow next week ahead of a new issue.