Covered Bonds

Achmea Bank has issued its first conditional pass through covered bond, pricing in exactly the same steps with the same final result as Aegon had earlier this week.

Deutsche Hypo issued its first green Pfandbrief flat to where it would have issued a vanilla deal, and though it was unable to tighten the spread from refined guidance, leads built the book in record time.

OP Mortgage Bank was set to price the first €1bn sized covered bond of the week on Wednesday and, despite offering hardly any new issue premium, the transaction found strong demand reflecting a popular but exceptionally rare tenor. At the same time, Switzerland's Valliant Bank issued its debut covered bond and Sparkasse Hannover issued a sub-benchmark Pfandbrief.

Some weaker days in the secondary market have focused minds on market conditions going into the final weeks of trading for the year. But investors are still lapping up covered bonds.

Santander Consumer Bank is set to issue its first Pfandbrief on Wednesday after it mandated lead managers for a roadshow last week.

DBS Bank became the first covered bond issuer from Singapore to price a deal through mid-swaps on Tuesday.

Aegon Bank smashed through the mid-swaps flat barrier to price its first conditional pass through (CPT) covered bond substantially below the reference rate on Tuesday. The deal’s success implied that investors saw through the weakness of the structure to the strong credit, or that they have lost their capacity to price extension risk.

Danske Bank extended its covered bond maturity curve by more than five years on Tuesday, breaking with tradition to price in line with where SEB recently issued.

Austrian lender Raiffeisenlandesbank Oberösterreich (RLB OÖ) issued its first unsecured deal on Tuesday — and plans to bring one or two more benchmark transactions in covered or senior next year.

DBS Bank has mandated leads for a euro benchmark, capitalising on very tight spreads, the strong performance of its previous debut and a number of exceptionally well received seven year euro deals that have priced flat to mid-swaps.

Global covered bond primary volume across all currencies is set to rise by €25bn from 2017 to €150bn equivalent in 2018 according to analysts at Crédit Agricole research. Issuance will be boosted by new borrowers and refinancing of liquidity borrowed under the term long term refinancing operation (TLTRO).

Sparebank 1 Boligkreditt and Santander UK unearthed solid demand in the sterling covered bond market this week as the Norwegian issuer priced its first in the currency.