Covered Bonds

Crédit Agricole announced plans on Tuesday to market its first covered bond from its social framework in what will be a rare maturity. At the same time leads on Credito Emiliano's proposed covered bond opted to wait until the European Union prices its deal is priced before launching.

Canadian Imperial Bank of Commerce revealed the mandate on Monday for the first Canadian dollar covered bond of the year and the first to be issued in 144A format in over 12 months. Prospects for further issuance in the currency are promising.

National Australia Bank priced an €850m seven year Australian covered bond on Monday, comfortably inside recent deals from New Zealand and opted against issuing a larger deal size at a wider spread. At the same time, Credit Emiliano mandated leads for another euro benchmark.

GlobalCapital is preparing to launch its Covered Bond Awards for 2021 and welcomes feedback from the market around which achievements should be recognised.

National Australia Bank has mandated leads for the first Australian covered bond in euros for over two years. With redemptions outstripping supply this month, the NAB deal could be the beginning of a spurt of issuance.

Three covered bonds issued this week from Korean Housing Finance Corp, Caffil and Oberbank were well received, but they would not have made it over the line without attractive new issue concessions.

Rates markets have been well supported in the last few days, but covered bond spreads are still a little shaky with market makers waiting to see the outcome of the next deal from the EU for its €800bn Next Gen programme that is expected to emerge on Monday.

The European Banking Authority has published guidance on environmental, social and governance risk that illustrates an overriding need for transparency. It comes as Jyske Realkredit becomes the first bank to disclose information on its green mortgages under the European Covered Bond Council’s newly set up Energy-Efficient Mortgage Label initiative.

Austria’s Oberbank issued its first green covered bond on Thursday under its newly established green framework. Consistent with recent deals, the transaction was priced 2bp inside the initial spread with a 2bp new issue concession as investors showed once again that they are sensitive to price.

The blockchain firsts in capital markets are coming quickly. DZ Bank is marketing a corporate Schuldschein that will run back office functions on a blockchain for the entire duration of the trade — the first time this has been done — while Société Générale’s subsidiary Forge is working on various permutations of trades to be issued using this form of distributed ledger technology. While blockchain tech is still in its infancy, it is set to disrupt capital markets, creating winners and losers.

Ahead of what is expected to be a long, dry summer in the primary covered bond market, Korean Housing Finance Corporation (KHFC) and Caffil were out on Wednesday with €1bn new issues.

Since Friday last week the European Central Bank has stepped up asset purchases under its Pandemic Emergency Purchase Programme, giving secondary markets in rates products renewed vigour, said traders on Tuesday.