Covered Bonds

Syngenta, the agricultural chemical and seed company, returned to the Swiss franc market this week for its second Swissie bond of the year — a blowout three year deal that surpassed the market’s expectations.

DNB Boligkreditt on Thursday issued its first euro covered bond since January 2019 in large size, pricing inside its own curve — once again underscoring the strong technical backdrop to the market.

National Bank of Greece (NBG) has become the lowest rated bank to issue green debt, after winning two times as much demand as it needed for a €500m senior bond on Thursday. The trade formed part of a flurry of green issuance in the FIG market, alongside new deals from Banque Fédérative du Crédit Mutuel and Mizuho Financial Group.

Fédération des Caisses Desjardins du Québec (CCDJ) issued the first Canadian covered bond in dollars since May on Wednesday flat to where the major Canadian banks issue senior unsecured debt.

After mandating leads on Monday, Fédération des Caisses Desjardins du Québec (CCDJ) opened order books on Wednesday for its first dollar deal in over a year and the first dollar covered bond since May. In the meantime, investors were waiting for Sumitomo Mitsui Trust Bank's first deal amid renewed hopes that a core European issuer will mandate before the end of the week. With redemptions mounting, there are hopes that other issuers will pounce on the market early in the fourth quarter.

Ireland won kudos for the swift economic recovery that followed the sovereign debt crisis, but with a considerable portion of residential mortgage loans overdue or restructured, its housing market was in a terrible state even before the impact of Covid lockdowns, let alone the peril a disorderly Brexit may bring.

The European Central Bank's decision to withdraw repo facilities for structured covered bonds from the start of next year may disincentivise issuers from structuring further deals without a law.

September’s highly oversubscribed covered bonds meant the European Central Bank’s primary market order was considerably cut, forcing it to scour the secondary market for paper. With October’s supply likely to be lower and redemptions expected to soar, the ECB must become an even more aggressive buyer, or watch its portfolio shrink.

Fédération des Caisses Desjardins du Québec (CCDJ) mandated leads for its first dollar covered bond in a year on Monday. The issuer joins Sumitomo Mitsui Trust Bank, which on Monday crystallised plans to press ahead with its debut deal following a period of soft marketing, while Swedish non-conforming lender Bluestep Bank commenced marketing on Monday.

Turbulent conditions forced several banks to delay bond issuance plans this week, and one even pulled a transaction after launch. Deal flow is likely to pick up again soon, but the cost of funding is certain to be higher, writes Tyler Davies.

Deutsche Pfandbriefbank attracted more demand for its first Sonia-linked Pfandbrief on Thursday than it has for any covered bond it has ever issued. It was the first public deal from a financial institution with a guaranteed high coupon.

Take-up was higher than expected for the European Central Bank’s latest series of Targeted Longer-Term Refinancing Operations on Thursday. But an overall allotment of €174bn still paled in comparison with the last round, as banks showed they already had plenty of excess liquidity on their balance sheets.