Covered Bonds

Aareal Bank secured what syndicate officials considered an attractive funding level with a Eu1bn three year mortgage Pfandbrief this week priced at 5.5bp through mid-swaps.

Bank of America’s size and credit quality enabled it to ride out the storm in the US subprime mortgage market this week and price its Eu4bn two tranche debut covered bond at an impressive level.

Expectations that Commerzbank will merge Hypothekenbank in Essen with Eurohypo have risen after Hubert Schulte-Kemper, Essenhyp’s founder and chairman of its managing board, resigned last week.

Landesbank Baden-Württemberg launched the tightest ever jumbo Pfandbrief this week, albeit a rare two year public sector-backed issue, priced at 10.5bp through mid-swaps.

Northern Rock encountered strong demand for its 10 year covered bond this week as leads ABN Amro, DZ Bank and UBS built a book of more than Eu5bn in two hours and increased the size from Eu1.5bn to Eu1.75bn.

Cédulas TDA successfully raised Eu2.75bn of long dated paper in spite of the recent volatility, selling a new Eu1bn 20 year deal, increasing its Eu1.5bn 2031 issue by Eu1.375bn and adding Eu375m to its Eu1.35bn 2021 deal.

Anglo Irish Bank Corp will launch the first UK covered bond to be backed by commercial mortgages next week, potentially carving out a new asset class within the wider covered bond market.

Nord/LB Covered Finance Bank plans to issue its first lettres de gage publiques in the second half of April, the first issue off a new Eu5bn EMTN programme that Nord/LB Girozentrale is arranging.

BNP Paribas launched its second structured covered bond yesterday (Thursday), a Eu2bn three year issue.

The pricing of AyT Cédulas Cajas Global's 10 year issue this week cemented the Spanish covered bond market's tighter levels. The Eu2bn deal was priced 1.5bp inside where AyT's Eu2.28bn 10 year issue was priced in December.