Covered Bonds

Sustainable covered bond issuance could hit a record high in 2021, and with the ECB considering introducing mandatory climate disclosures for its collateral and purchase programmes, analysts expect the sector to find growing market support over the next few years.

Across the markets covered by the PMM, issuance volume has remained roughly consistent in each of the last four weeks, averaging just over $35bn, with last week's total reaching $41bn. However, last week the number of transactions plummeted from an average of 29 each week in the three weeks before to just 13.

Commonwealth Bank of Australia (CBA) has returned to the long end of the covered bond market sell its first private placements in the format since 2019.

The spread outlook for covered bonds is likely to remain positive over the summer period, said traders, even though yields are negative. The main risks to that prognosis are likely to emanate from the possible course of inflation.

Covered bond investor demand has suffered over the past few months with the onset of competing supply from the EU in the SSA market. Despite that, investors have been broadly optimistic on the outlook, particularly in intermediate maturities.

Credit Suisse has filled six roles in its sustainability strategy, advisory and finance (SSAF) group, headed by Marisa Drew, including a global head of net zero strategy.

GlobalCapital is thrilled to announce that the survey for this year’s awards is now open. All market participants are invited to take part.

Only four member states have transposed the EU’s Covered Bond Directive into national law on time. As seven are nearly there, the other 16 members will have to work hard to meet the July 2022 deadline for implementation, after which the European Commission could activate infringement procedures.

Georgia has become the latest country to signal its intention to develop a covered bond law, though given the small size of its mortgage market, issuance prospects are likely to prove limited.

GlobalCapital is delighted to announce that the Covered Bond Awards 2021 survey will open for voting from Thursday. Congratulations to all those who made it to the shortlists.

Covered bond primary activity slowed to a trickle in euros on Wednesday as DekaBank issued an oversubscribed sub-benchmark sized five year public sector covered bond amid a pick-up in European Central Bank purchases. At the same time, Muenchener Hyp (MuHyp) tapped the Swiss franc market in the wake of a four part Sfr910m ($992m) deal issued on Tuesday by Swiss Pfandbriefbank.

The covered bond and sovereign, supranational and agency sectors were well very well bid on Tuesday despite supply from the European Union and US T-Bill auctions. Even though US inflation is proving to be much higher than expected, dovish comments from the European Central Bank and the expectation of lower supply over the summer kept the mood light in secondary markets.