Covered Bonds

Crédit Agricole Italia has mandated its parent company’s investment banking arm to arrange investor calls ahead of its inaugural green covered bond.

Oldenburgische Landesbank (OLB) is set to issue its first Pfandbrief sometime next week, after mandating leads for a roadshow.

Hypo Tirol issued its first Pfandbrief to fund affordable housing on Thursday.

The European Central Bank managed to buy more covered bonds on a net basis in February than it did January, but the asset class fell as a proportion of its total asset purchases. In the absence of fresh supply, it was forced to source paper in the secondary market, but at a markedly lower pace than before.

SR Boligkreditt issued its largest and longest covered bond on Wednesday, at the tightest spread it has achieved in more than three years, slightly inside fair value.

Hypo Tirol Bank has mandated leads to roadshow its first social covered bond and SR Boligkreditt has mandated leads for a vanilla deal. Both issuers plan on following printing 10 year deals, where yields are almost positive.

Sameer Rehman, director of debt and capital markets at TD Securities in London, is heading back to Toronto after 12 years in the UK to focus on Canadian public sector borrowers.

HVB, the Germany subsidiary of UniCredit, attracted more demand for its €750m 10 year than any Pfandbrief of that size launched in over a decade.

A return to dollar funding by SSA borrowers capitalising on higher yields last week dragged the average subscription ratio lower.

Increased consumer spending leading to a fall in deposits would provide the catalyst for higher covered bond issuance, according to one European bank's head of funding. But only if the credit curve steepens and senior debt grows more expensive to raise relative to covered bond funding.

UniCredit’s German subsidiary, HVB, is expected to open order books for a 10 year benchmark on Tuesday. With swap yields currently just positive, the deal has a slim chance of offering a positive return.

Bankers do not expect to a resurgence of primary covered bond supply in March with banks expected to focus on regulatory issuance. ECB covered bond purchase data was due on Monday afternoon, with market participants eager to see if the central bank increased its buying to contain the recent rise in yields at the long end of the curve.