Covered Bonds

NordLB attracted a strong order book and paid little new issue premium for its first dollar covered bond — also the first dollar covered bond of 2018 — a defensive three year dollar Reg S Lettres de Gage publiques.

Deutsche Apotheker- und Aerztebank issued a tightly priced €500m seven year mortgage Pfandbrief on Tuesday, paying a minimal new issue premium even though market conditions were awful.

Deutsche Apotheker-und Aerztebank (apoBank) has mandated joint leads for a seven year Pfandbrief. It follows one of the busiest starts to the covered bond market in years. With a more limited supply outlook spreads should stay stable for now. But with yields rising and relative value declining, core European borrowers will become ever more reliant on the Eurosystem to support their deals.

Landesbank Hessen-Thüringen Girozentrale (Helaba) and Sparkasse Pforzheim Calw issued tightly priced Pfandbriefe with quite limited demand on Thursday.

BPER Banca has become the first covered bond issuer to publish and upload loan data into the European Data Warehouse (ED). The move will boost investor appeal, help rating agencies meet European Central Bank requirements and could become important for programmes with extendable maturities.

Covered bonds issued this week undermine the assumption that peripheral markets are likely to be more vulnerable to a spread widening when the European Central Bank cuts net purchases to zero under the covered bond purchase programme (CBPP3).

Landesbank Hessen-Thueringen Girozentrale (Helaba) and Sparkasse Pforzheim Calw have mandated leads for Pfandbrief transactions to be launched on Thursday.

Deutsche Hypo returned to the covered bond market on Tuesday, following the wake of a series of German borrowers last week, to issue a four year tap. Although the pipeline is empty, 'the floor is wide open’ for an opportunistic issuer to follow on Wednesday.

Rabobank returned to the covered bond market on Tuesday to issue the tightest €1bn-plus sized triple-A rated 10 year since the crisis.

La Banque Postale (LBP) managed to find good demand for a 10 year covered bond on Monday even though the spread to OATs has tightened and could become problematic.

Bankinter followed last week’s blow out sovereign issue from the Kingdom of Spain to launch a covered bond on Monday. With an unreconciled order book of €1.6bn and little price sensitivity, the offering contrasted starkly to earlier peripheral covered bonds seen this year.

Norway's SpareBank 1 Boligkreditt this week issued the first covered bond secured solely on energy-efficient green residential homes. The transaction not only provides a solid template for other Norwegian borrowers, but may well lay the groundwork for covered bond and RMBS issuers throughout Europe.