Covered Bonds

The prospect of Italy's government collapsing began to take its toll on bank debt markets on Thursday morning, with some new issues underperforming in light of the crisis.

Natixis has promoted four DCM co-heads in its financial institutions and corporate origination business lines.

The covered bond market went from famine to feast on Wednesday with a wide array of deals that all went very well.

Komerční banka sold the Czech Republic’s first euro denominated benchmark covered bond on Wednesday, landing flat to the curve of its Slovakian neighbours despite the European Central Bank’s absence from the book.

Latvian covered bond legislation permitting the cross-border recognition of cover pool assets is expected to be enacted later this year. The new law is considered to be essential for the development of a pan-Baltic covered bond market, legal experts have said.

Deutsche Pfandbriefbank (PBB) has mandated leads for a three year dollar covered bond in a move that underscores the importance it attaches to matched currency funding.

Nomura has expanded its covered bond trading capacity with a new hire from BNP Paribas.

The unprecedented shortage of primary covered bond supply, mounting redemptions and depleted trading inventories have created an acute squeeze on pricing. A much bigger wave of investors will soon be forced to exit the market if new bonds don't materialise.

Caisse Francaise De Financement Local (Caffil) issued only the second covered bond of the year in a large size on Monday, pricing the deal flat to its curve. Despite the prospect of mounting covered bond redemptions, the supply outlook remains abysmal, suggesting spreads will tighten more.

The combination of Deutsche Hypo into NordLB has failed to cause much of a stir in the covered bond market as, even though the merged cover pools will be very different, spreads between their Pfandbrief curves have little room for manoeuvre.

After issuing the first green covered bond, Sparebank 1 Boligkreditt has now become the first bank outside the UK to undertake a Sonia consent solicitation. The consent solicitation will increase pressure on other issuers outside the UK to follow suit.

KEB Hana Bank (KHB) of South Korea has set up a covered bond programme and, given the strength of market conditions, there are high hopes that a deal will be mandated soon.