Covered Bonds

Banco di Desio e della Brianza attracted outstanding demand for its debut covered bond, reflecting its rarely seen juicy spread and a scarcity of Italian supply this year. At the same time investors were receptive to Raiffeisenlandesbank NiederÖsterreich-Wien's (RLB NÖ-Wien) first deal in two years.

Nykredit Realkredit attracted demand of over €1.5bn for its debut syndicated covered bond this week, a deal which despite being issued in rare floating rate format was readily absorbed by a new diversified group of mainly bank treasury investors.

After an absence of almost two years, Austria’s Raiffeisenlandesbank Niederoesterreich-Wien (RLB Noe-Wien) mandated joint leads for a seven year euro benchmark covered bond.

Compagnie de Financement Foncier (CFF) enjoyed stellar demand for its €1.25bn seven year covered bond on Monday and, despite pricing flat to its curve just a few days before the European Central Bank policy meeting and after another nuclear test from North Korea, the deal attracted extraordinary demand.

The covered bond pipeline is set to empty early next week as issuer remain mindful to avoid the window around the European Central Bank’s next meeting on Thursday.

German banks printed the only euro denominated covered bonds in the primary market this week, with Deutsche Pfandbriefbank and Berlin Hyp selling mortgage-backed deals in the belly of the curve.

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Supply-starved investors have been quick to get involved in the first senior bond transactions in euros in nearly a month, with banks leaping back into the market this week following the summer holidays.

Canadian Imperial Bank of Commerce (CIBC) could sell two tranches of long three year covered bonds in Australian dollars this week, as foreign issuers monitor the cash-rich market for opportunities to fund themselves at competitive levels.

Italy’s Banco di Desio e della Brianza picked banks on Tuesday to arrange the sale of its first euro covered bond, in a deal that could kickstart issuance from the European periphery following the summer break.

Deutsche Pfandbriefbank and Berlin Hyp found different fortunes selling mortgage-backed Pfandbriefe in the belly of the maturity curve on Tuesday, as covered bond issuance looked ready to take off following the summer break.

Writing in its European Covered Bond Fact Book for 2017, the European Covered Bond Council said that when banks turn their attention to funding for liquidity purposes they could favour senior preferred debt over covered bonds.