Covered Bonds

Nationale-Nederlanden Bank (NN Bank) issued its first covered bond flat to fair value, yet still managed to achieve a subscription ratio higher than any other Dutch covered bond in at least five years.

National Bank of Greece’s covered bond rating would be higher given the bank’s commitment to a 25% minimum overcollateralization ratio, but this is constrained by the sovereign and issuer rating.

National Bank of Greece (NBG) has appointed leads to market its first covered bond since the Greek sovereign crisis. Meanwhile, Nationale-Nederlanden (NN Bank) has signalled its intention to press ahead with its debut deal following its recent roadshow.

Covered bonds secured against assets that are not compliant with the capital requirements regulation’s (CRR) definition of covered bonds should not be eligible for liquidity coverage ratio (LCR), according to the European Banking Authority (EBA) — a view that is at odds with current market practice and the Commission’s Delegated Act.

EU officials from various institutions are pushing to complete the ‘third pillar’ of the Banking Union, despite strong opposition from a number of public and private stakeholders.

Finnish covered bond issuer SP Mortgage Bank has appointed leads for a roadshow that is scheduled to finish in mid-October. As only two Finnish covered bonds have been issued this year, a warm reception is assured for the rare offering.

Piraeus Bank will privately place a €500m five year covered bond to three supranational agencies in order to support €700m of new lending to small and medium sized companies across Greece.

This week’s slate of covered bonds saw record after record broken — a mania that was evident across the whole FIG sector. With European rates set to remain at their lows throughout next year and the macroeconomic backdrop continuing to improve, it is difficult to see what could spoil the party.

Oversea-Chinese Banking Corporation (OCBC) issued a €500m five year covered bond on Thursday that was more oversubscribed than any previous Singaporean deal and priced inside fair value in what a lead manager described as ‘a one-way market’.

NordLB received a higher level of demand for a €500m seven year Pfandbrief this week than in its previous two deals, showing it has good access to capital markets despite challenges it faces dealing with a €9bn bad shipping loan portfolio.

Oversea-Chinese Banking Corporation (OCBC) and NordLB have signalled their intention to exploit exceptionally strong covered bond market conditions and open order books for transactions on Thursday.

Deutsche Apotheker und Aerztebank (Deutsche Apo) issued the tightest German 10 year Pfandbrief of the year on Wednesday at a level that was probably through interpolated fair value.