Covered Bonds
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Following the reopening of the cédulas market by Sabadell last week Spain’s BankInter has closed the books on a Eu1.5bn two year at 52bp over mid-swaps and Bancaja has set its sights on a smaller deal at wider pricing. Despite the burst of supply and apparent lack of co-ordination among the issuers, the sector is holding up and indeed offering encouragement to the wider market.
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In brief: DnB Nor Boligkreditt is expected to be the next issuer into the market and is already building a shadow order book, with launch understood to be imminent.
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Members of the European Covered Bond Council will be meeting next Wednesday (May 14) to hear presentations from companies interested in creating electronic trading platforms in response to the market’s discussions on how to improve secondary market liquidity. Six proposals catering to the two camps of opinion in the market are expected.
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Potential issuers are hoping that the primary market will remain open for a fifth successive week, despite the holidays in the UK on Monday and in France on Thursday and the following Monday. Activity could kick off as early as Monday, according at least one banker, with several names on the radar – provided, of course, that a semblance of stability remains.
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Spain has put itself firmly back on the covered bond map in the last fortnight, with large but contrasting issues from Banco de Sabadell and La Caixa. Analysts are firm on which of the two lights the way for the cédulas market, even if the supply outlook for the country is still unclear.
