Covered Bonds

Central and Eastern Europe earmarked as an area of growth by market participants

Elena Bortolotti was promoted to managing director at Barclays in January 2022

◆ British lender fixed spread and deal size from outset ◆ Order book closed at over two times the deal size ◆ Fixing terms enabled faster execution, the lender said

◆ Largest Czech bank tightened spread by 8bp ◆ Subsidiary of Erste Group announced mandate on Monday ◆ 'Arithmetically, there is no FV', a banker said

Easily dismissed as "fast money" with all the negative implications that can bring in the primary bond market, hedge funds are becoming increasingly important to covered bond issuers

◆ Sterling trade was lender's third tranche of covereds this year ◆ 48bp was in line with fair value, a banker said ◆ Santander UK's first sterling covered since May 2025

◆ OCBC's prices first covered bond since April 2025 ◆ 10th Asian covered issued in 2026 ◆ Order book peaks at over €2bn but lost €400m

◆ EU regs plan sparks debate over treatment of secured borrowing ◆ Blistering corporate and FIG issuance but why are premiums rising in one market but not the other? ◆ UK Renters' Rights Act to impact UK buy-to-let RMBS market

Funding across all parts of the capital structure is available with issuers likely to prioritise unsecured borrowing

◆ Issuer lands in 'the place to be' amid strong demand for covereds ◆ Achieves its largest covered book since at least 2023 ◆ After 7bp tightening the bond was spotted another 2bp tighter to erase new issue concession

Market participants have questioned if the differential in the risk-weightings between securitized and covered assets will affect demand for covered bonds

The fears of the covered bond market reflect a lack of conviction in the superiority of the product