Covered Bonds
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EU spreads widen as supranational and agency investors hedged against Bunds face steepening losses -
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
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Modestly sized deals in intermediate maturities with a fair concession worked well
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End of the special discount rate and net stable funding ratio efficiency to drive early repayments
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Second tier SSA issuers and covered bonds at the short end of the curve are a ‘screaming buy’ compared govvies, say traders
