Covered Bonds
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The books were this (Monday) morning opened on a Eu1bn two year public sector Pfandbrief for Berlin-Hannoversche Hypothekenbank, with the solid German investor base and short maturity helping the issuer to steal a march in a week that will be interrupted by public holidays. It is also the first new issue from Germany since Düsseldorfer Hypothekenbank (DHB) had to be transferred to the Association of German Banks (BdB) guarantee fund on Monday of last week.
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Norway’s two benchmark covered bond issuers, DnB Nor Boligkreditt and Sparebank 1 Boligkreditt, were on tour in Germany last week doing their best to attract investors’ attention, only to go on to stress their low profile in the market. One of the central messages of the presentations and the dual roadshow, hosted by UniCredit, was to highlight the exclusivity and the high quality of Norwegian jumbos.
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Norway’s Storebrand executed its first covered bond issue in its domestic krone market on Friday, selling a Nkr2bn two tranche issue through DnB Nor Markets. The issuer has recently been on the road ahead of its non-jumbo euro debut.
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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.
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The pricing and extended bookbuilding on Banque Populaire group’s (BFBP) new Eu1bn three year covered bond surprised some market participants this week, who considered it aggressive, but a representative of the issuer told The Cover that he was pleased with the new deal and considered that it came at the right level.
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La Caixa was able to size its three year puttable cédulas hipotecarias at Eu1.5bn this (Friday) morning, larger than any of the jumbo covered bonds that were launched this week.
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Last week the Federal Deposit Insurance Corporation laid the foundations of a US covered bond framework with a draft policy statement that it hopes to finalise in the autumn. The Cover spoke to Washington Mutual, the first US issuer to have launched a covered bond, for its reaction to the move.
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Swedbank Mortgage is planning to launch its inaugural euro jumbo covered bond after a roadshow early next month. A funding official in Stockholm told The Cover that the issuer is likely to launch two benchmarks per year.