Covered Bonds
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Price guidance touching the double-digits over mid-swaps for Hypo Real Estate International’s two year mortgage Pfandbrief this morning showed that even German credits cannot escape the new demands being placed on covered bond issuers today.
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Bayerische Landesbank achieved one of the highest international distribution numbers for a jumbo Pfandbrief since last summer, placing around two-thirds of its Eu1.5bn long three year public sector backed deal outside Germany when the issue was priced on Friday.
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While last week’s four jumbos did not exactly amount to a storm, the short burst of issuance was a welcome pick-up from the doldrums of February and March. However, the market was becalmed again today (Monday), although more supply could emerge this week – and much later from unexpected sources.
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BayernLB is expected to price a new three and a half year benchmark sized public sector Pfandbrief today, after opening books yesterday (Thursday) after the European Central Bank's decision to hold rates stable. The leads were able to increase the size of the deal after books were left open overnight for orders from Asia.
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CIBC has mandated ABN Amro, CIBC, Commerzbank, Merrill Lynch and HSBC to lead manage its debut covered bond. The bank will be roadshowing late this month.
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The Dexia group on Wednesday demonstrated the diversity of funding options it enjoys, adding a jumbo Pfandbrief to its issuance this year. The Eu1.5bn two year issue nevertheless showed the limits of what issuers can achieve in today's market. (Updated to include quotes)
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CIF Euromortgage successfully priced its Eu1bn two year obligations foncières at 4bp over mid-swaps yesterday (Thursday), the middle of guidance. The leads said that the new issue had represented a real test of CIF’s resilience.
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The Cover understands that Christof Jütten is leaving Goldman Sachs. He has been an executive director in the firm's financing group and a key part of the firm's covered bond franchise.
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CIF Euromortgage has opened the books on a benchmark sized two year obligations foncières issue. Market participants described the guidance of 3bp-5bp over mid-swaps as necessary to catch the attention of investors in light of recent senior unsecured deals.