Covered Bonds

German bank mandates leads for first covered bond in over a month, choosing rare five year tenor

New funding goals mean FIG supply volumes could be even lower than expected in 2021

A pair of banks moved the bar downwards as they printed two of the tightest Australian dollar deals since the 2008 financial crisis: ING Australia found demand for dual tranche covered bond, while United Overseas Bank tapped the three year point of the curve.

ING is set to print the first Australian dollar covered bond of the year this week. Covered paper out of the region has remained scant over the last 12 months, but issuance is set to pick up as onshore lenders start to think about life after the end of the Reserve Bank of Australia's Term Funding Facility.

The Swedish krona covered bond curve has steepened over the course of the year alongside a rise in net issuance, with last month's volumes almost twice those of last July.

Central banks’ control was once limited to financial matters — they squatted in the corner, largely unseen. Now, they are stars in the drama — active, talkative stewards of the economy. Society looks to them to solve its problems; not to synch with government, but to make up for its deficiencies.

Central banks are promoting a set of climate scenarios that may encourage banks to continue financing fossil fuel expansion when they should be shutting it down, according to an NGO — highlighting the immense influence central banks could have on climate policy.

The European Central Bank’s Targeted Long Term Refinancing Operation may never disappear, but the central bank will find it difficult to maintain record-breaking interest rates on its loans as the economy recovers from the pandemic. As the terms of the liquidity scheme surely begin to tighten, issuers will have a greater incentive to repay TLTROs and switch to market funding.

Depfa ACS has bought back its remaining Irish covered bonds. Ireland has now lost a total of three covered bond issuing banks leaving two behind — and they haven’t come to the public market for years.

The volume of retained covered bond issuance used for European Central Bank repo purposes exceeds distributed by many times in several countries. While this repo has provided a welcome boost to bank profits, it has come at the expense of long-term banking sector stability.

Polling for GlobalCapital's Covered Bond Awards 2021 closes at 5:30pm London time on Monday, August 16, so please be sure to cast your firm’s vote if you haven’t already done so. Preliminary data shows that the frontrunners for many awards are in close contention, so every vote stands to make a huge difference.

Pfandbriefbank Schweizerischer Hypothekarinstitute woke up the Swiss franc market on Tuesday by selling the first bond in almost a fortnight.