Covered Bonds

Bausparkasse Wuestenrot dropped into the MTN market in search of covered debt earlier this week, ahead of its forthcoming debut public senior deal.

Landshypotek Bank sold a trio of covered bonds in the MTN market this week, including its largest single tranche deal since April last year.

Tuesday's €750m 10 year covered bond from ASB Finance demonstrated commitment to the market according to the bank's Treasurer, Chandu Bhindi, who spoke to GlobalCapital about the deal on Thursday.

Triple-B credit OC Oerlikon achieved a remarkable result on Monday, said bankers, as it issued a Sfr575m three tranche deal, which it will use to fund its acquisition of INglass. It was joined on screens by Pfandbriefbank's smallest deal since 2019.

Commonwealth Bank of Australia's New Zealand subsidiary ASB Finance issued its largest covered bond on Tuesday, the first 10 year from New Zealand and the first covered bond from the country since January 2019. The focus for this week’s transaction was all about re-engaging with investors, said ASB Bank treasurer, Chandu Bhindi.

Berlin Hyp and HVB took advantage of strong market conditions this week to issue to highly successful Pfandbriefe.

A draft regulatory technical standard (RTS) assessing risk weights and loss given default of mortgage risk, which the European Banking Authority has opened a consultation on, should give discretionary power to member states, said a lawyer on Thursday.

Pfandbriefbank Schweizerischer Hypothekarinstitute priced its smallest deal in 18 months this week, attracting several international accounts to a tightly priced Sfr350m ($385.8m) note.

GlobalCapital talked to Sarim Farooqi, senior vice-president and treasurer at Laurentian Bank, about the issuer’s recent C$250m five year debut covered bond, established under its new C$2bn covered bond programme, and what the bank’s next moves in the covered bond market could be.

UniCredit’s German subsidiary, HVB, enjoyed a stunning investor reception for its negative yielding eight year Pfandbrief that was issued on Wednesday, thanks to the lack of supply this year, the small but rare premium on offer and the superb market conditions.

The European Central Bank is struggling to maintain its exposure to peripheral European covered bonds this year, due to falling issuance, and has therefore increased its exposure to core European markets. This trend is set to continue, as supply will remain muted — even though banks are running out of eligible collateral to pledge for repo funding.

Berlin Hyp took advantage of its flat covered bond credit curve and the steepness of the interest rate curve to issue a high yielding 12 year mortgage Pfandbrief on Tuesday, in a larger than usual size.