Covered Bonds

Sparebanken Vest Boligkreditt has mandated joint leads for a five year euro benchmark covered bond that will likely launch on Tuesday.

Compagnie de Financement Foncier (CFF), which had financed the mortgage and public sector lending activities of Crédit Foncier and BPCE Group, will in future issue Obligations Foncières to refinance only the public sector assets of the BPCE Group.

Berlin Hyp (BHH) was on Monday set to issue its largest covered bond in four years, and with the shortest tenor of any European deal so far this year.

Berlin Hyp AG (BHH) has mandated joint leads for its third deal of the year, and the shortest maturing covered bond issued in euros from a eurozone bank in 2018. The appealing tenor and lack of guidance on deal size raises the possibility of a larger than usual transaction size.

The proportion of green covered bonds in the market could rise substantially as regulators push for greener finance and banks focus increasingly on financing of green assets, according to a report published this week by Standard & Poor’s.

Deutsche Apotheker-und Aerztebank (ApoBank) issued a comfortably oversubscribed 10 year Pfandbrief which was priced at the widest level of any German 10 year issued so far this year.

Covered bond issuers are monitoring the dollar market with recent deals from DNB Boligkreditt and CIBC suggesting a welcome reception for further issuance. However, Canadian banks, perhaps the most likely dollar issuers, could well be enticed to consider their home market following TD’s recent success.

After a series of 10 year Pfandbrief flops, Deutsche Apotheker-und Aerztebank (ApoBank) has decided to test appetite for another German 10 year with, unusually, its second deal of the year.

Three banks showed they were thirsty for topping up on their existing stock of covered bonds on Tuesday, with Bank of New Zealand favouring the format over senior unsecured and Commerzbank tapping one of the four deals it has sold already this year.

Bank of New Zealand has chosen a covered bond as the format for a new deal, after originally announcing it would consider senior unsecured or covereds.

Commerzbank and Oma Savings Bank both said on Monday that they were looking to tap existing covered bonds, as issuers tiptoed into the new week monitoring primary market conditions closely.

The European Banking Authority has spelled out its thoughts about the worth of creating a market for European Structured Notes (ESNs), a covered bond-like dual-recourse instrument backed by a broader range of assets than legislative covered bonds ahead of a public hearing on the potential asset class next week.