Covered Bonds

HSBC Bank Canada is set to meet investors with a view to issuing the first dollar covered bond since the summer break and its second covered bond ever. The plans comes amid a growing euro pipeline and follows the first deeply negative yielding euro trade.

Virgin Money plc has mandated leads for a European roadshow and hopes to issue its first euro denominated covered bond. The transaction is set to emerge at a challenging time, amid rising concerns that the UK will chaotically leave the European Union without reaching an exit agreement at the end of October.

BerlinHyp (BHH) reopened the covered bond market after the summer break with a €1bn three year that yielded almost 20bp less than the European Central Bank’s deposit rate. The transaction could cause some issuers to reconsider their funding approach as the deal can profitably refinance liquidity borrowed under the last Targeted Longer-Term Refinancing Operation (TLTRO II).

ASB Finance Limited has announced plans to sell either a covered bond or a senior bond next month, as FIG bankers suggested that issuers would be careful about restarting supply following a volatile summer period.

The Covered Bond Awards 2019 poll closes today and with only a few votes splitting the top contenders for several award categories, its not too late to make a difference.

Yields continued to tumble in the Swiss franc bond market this week with Pfandbriefbank issuing the first 30 year covered bond to be sold with a negative yield, following Münchener Hypothekenbank (MünHyp) striking a new record low for covered bond yields with a nine year trade.

Sparebanken Vest (SparVest) on Thursday became the fourth Norwegian bank to publish a green bond framework and one of the first to publish a framework that is aligned with the European Union’s proposed standards for green bonds.

UK Sonia-linked covered bonds were trading stably on Tuesday, in contrast to euro denominated UK covered bonds which have been marked wider amid rising expectations the UK will crash out of the European Union. But, with macro-economic risks abounding, the global picture is disturbing bankers.

Participants in the financial institutions bond market had expected that issuers could hit screens with new transactions as early as this week, but so far macroeconomic and political uncertainty has discouraged them from putting investor appetite to the test this summer.

A ratings boost for Portugal could alert the country's covered bond issuers to the chance to print more, with the asset class at historically tight spreads.

Münchener Hypothekenbank (MunHyp) is introducing commercial paper to its existing Ecological ESG Pfandbrief programme.

Covered bond supply is expected to improve from the final week of August, and with more than 90% of the market now trading with a negative yield, a sustained wave of negative yielding issuance is now unavoidable.