Covered Bonds

Muenchener Hypothekenbank (MuHyp) managed to pull its Munich-based lead managers away from their beer gardens and swimming pools on Tuesday to announce a Pfandbrief mandate, though somewhat late in the day.

Covered bond spreads were marginally cheaper to Bunds across the board on Friday after a flight to safety caused German government bonds to rally. The move should bode well for the many issuers that will need to refinance maturing Pfandbriefe in the next few weeks.

National Bank of Greece (NBG) and another Greek issuer have confirmed they are looking at issuing the first Greek covered bonds since the sovereign debt crisis, reports Bill Thornhill.

GlobalCapital speaks to Wojtek Niebrzydowski, vice president, treasury, at Canadian Imperial Bank of Commerce about the implications for Canadian covered bonds under the country’s newly proposed resolution regime and ask what SEC Reg AB rule revisions mean for SEC-registered covered bond programmes.

The European Banking Authority (EBA) expects to see a rise in covered bond supply and most market participants anticipate a spread widening, but bankers do not expect issuers to produce a wave of covered bond pre-funding.

Canadian SEC-registered covered bond borrowers are expected to switch back to issuing under 144A/Reg S documentation after amendments to an existing regulation made SEC registration more onerous.

Rates could be hiked before the end of quantitative easing, it is reasonable to expect some Spanish covered bonds to trade in line with some in France, and although additional tier one is expensive to equities there is a sound structural reason for this. Derry Hubbard, global co-head of debt capital markets at Danske Bank, speaks to GlobalCapital about these topics and more.

The European Banking Authority said this week that it is not overly concerned by an increase in banks' asset encumbrance last year and a rise in covered bond encumbrance for the third successive year.

Akbank has sold its first mortgage-backed covered bond. The deal, which will fund green projects, was privately placed with the European Investment Bank.

The Czech Republic has proposed several legal amendments that will bring its existing covered bond regime into line with the European Banking Authority’s best practice guidelines and which, along with similar moves in Slovakia, will help catalyse new covered bond supply from the region.

The European Central Bank’s decision to curtail wind down entities' access to repo liquidity materially increases the risk of a covered bond maturity extension or default, and is not consistent with its mission as lender of last resort or its previously benign approach to the asset class.

Westpac this week followed Canadian Imperial Bank of Commerce in taking advantage of a glut of sterling covered bond liquidity. It issued a sizeable five year sterling covered bond which is expected to provide cheaper funding than the euro or dollar equivalent, boding well for additional supply.