Covered Bonds
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Take two minutes to respond to eight multiple choice questions -
Shorter durations, higher concessions and smaller books spell trouble
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The sovereign bond rally has underpinned SSAs but covered bonds are softening
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Swiss covered bond issuer pays no premium for bumper triple tranche offering
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Tighter Bund/swap spread and wider senior spreads blamed
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Bank of Nova Scotia garnered €2bn jumbo size with the shortest Canadian deal but spread widening pressure forces it and SP Mortgage Bank to pay up
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Core eurozone issuers pay higher new issue premiums after swap spreads tighten
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Away from the heavy Canadian issuance in euros this year, Bank of Nova Scotia diversified funding with Kangaroo covered bond
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The search for safety turns investors to covered bonds
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French three year deal and Berlin Hyp's five year collect combined demand of more than €5.5bn, undisturbed by repricing in the asset class
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Issuers and investors show affinity for the asset class as its pipeline fills up
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The tenor is not great for issuers but funding options are limited and investors love it
