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The article reports that the covered bond market has suffered one of its most volatile days. Dealers have decided by majority vote to quote wider bid/offer spreads for non-core covered bonds than for core markets, defined as Germany, France, Austria, Luxembourg and Depfa. ACI Germany was chosen as the forum for market-makers to discuss such situations after the Allgemeine HypothekenBank Rheinboden episode in October 2005, the last market-making crisis in covered bonds.

The article reports that Compagnie de Financement Foncier (CFF) has launched a 1 billion euro worth 10-year benchmark deal in April 2011. According to the article, the deal of CFF was slow in taking off despite the stable outlook provided by Fitch for French issuers. An overview of the debate over the reasons behind the struggle of the CFF transaction is provided. The breakdown of shares in the CFF deal is provided, with 39 percent for France and 38 percent for Austria and Germany.

The article reports on a 2 billion euro dual tranche senior self-led deal issued by Société Générale after the order book closed at 2.5 billion euros. France purchased 43 percent of the bonds, Germany and Austria bought 26 percent, and other countries such as Great Britain and Ireland bought bonds. Forty-seven percent of the paper was bought by fund managers.

The article focuses on the €1 billion bond issued by Natixis SA on May 21, 2007. The transaction was rated Aa2/AA/AA. The price guidance for the deal, which was sole managed by Natixis, has been tightened to 21 basis points. About 30% of the bond was sold to France and 20% each to Germany and Austria.

The article presents information on the Eurobond issued by Deutsche Pfandbriefbank on September 4, 2012 and will mature on September 11, 2015, which was arranged by Commerzbank, Deutsche Bank, DZ Bank and LBBW. The issuer will used the bond as a senior unsecured funding based on meeting with investors on a bilateral basis. The bond will be distributed to other banks, funds, insurance and other financial services sectors in Germany, Switzerland, Austria, Luxembourg and Scandinavia.

The article reports on the three benchmark covered bond deals from Deutsche Postbank, Kommunalkredit Austria and LBBW that helped in the recovery of the market. The deal from Deutsche Postbank was bought by a large German account on three reasons, including the declining German issuance, the attractiveness of the issue premium, and the acquisition of a stake in Postbank by Deutsche Bank as positive credit development. Figures show that the deal from Kommunalkredit Austria was priced at mid-swaps plus 68 basis points (bp), on a book of 640 million Euro.