Covered Bonds
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The short tenor and price transparency comforted investors, helping to drive early order book momentum -
Short maturity helped ensure ANZ paid a much lower concession for its deal than Bank of Nova Scotia
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Commerzbank’s transparent pricing ensured it was able to issue its largest covered bond ever
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EU spreads widen as supranational and agency investors hedged against Bunds face steepening losses
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The short tenor proved a decisive factor in capturing bank investor interest
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Sizeable deal could have been even larger had a shorter maturity been chosen
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Order books for sterling covered bonds have been slow to build and smaller than usual, despite a double digit spread widening
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Banks would be prudent to make the most of funding windows as they appear
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Despite wild rates volatility, secondary SSA and covered bond flows have been orderly
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Riskier names and deals will have to wait as investors look for defensive plays amid invasion volatility
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Sovereign, supranational, agency and core European covered bonds will be the first asset classes to re-open the primary market
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A superb outcome for the the five year portion of the deal sharply contrasted with limp interest in the 10 year
