Covered Bonds

Commonwealth Bank of Australia subsidiary, ASB Finance, has mandated leads for a roadshow to market its first covered bond of the year and the third from a New Zealand issuer.

Nationale-Nederlanden (NN Bank) has mandated leads to market its first covered bond, which will have an intermediate conditional pass-through maturity.

The Cover's 11th annual covered bond awards took place this year at Casa Llotja de Mar in Barcelona on Thursday, September 14. The awards reflected the judgment of more than 600 market participants, including over 300 investors, who reported buying €150bn covered bonds in the past 12 months.

PKO Bank Hipoteczny extended its covered bond curve this week with a deal that was more widely distributed and attracted more demand than any of its previous deals.

If the market commentariat thinks that the buy-side should be worried by upcoming European Central Bank tapering, then someone has yet to tell investors.

The various constituencies of the covered bond market voted quite differently this year and in some cases the final winning margins were close. See how the market voted for this year’s awards.

Santander Totta took advantage of the paucity of peripheral 10 year covered bond supply, a Portuguese sovereign rating upgrade and buoyant credit conditions to issue a well received €1bn transaction on Tuesday. Meanwhile, PKO Bank signalled its intention to open books soon.

Caffil set final terms of 2bp through mid-swaps for its no-grow €750m trade, this being the tightest spread the issuer has ever achieved for a 10 year trade.

The Cover and GlobalCapital held the annual Covered Bond Awards Dinner on Thursday night at Casa Llotja de Mar in Barcelona, celebrating the best performers in the market.

Risks including regulation, monetary tightening and the rise of the senior preferred asset class are touted as threats to the covered bond market. But participants on the opening panel of the Euromoney/ECBC Covered Bond Congress remained relatively unfazed.

Even though central banks continue to regularly buy up to 40% of covered bonds, borrowers are remarkably stoic about spread prospects even after the European Central Bank’s purchase programme (CBPP3) has ended, delegates at the ECBC/Euromoney covered bond congress heard on Thursday.

The Spanish covered bond legal framework is so vastly different from the rest of the world’s that it is likely to face the most severe challenges in trying to implement a harmonised European covered bond directive, delegates at the European Covered Bond Council’s plenary session heard on Wednesday.