Covered Bonds

The European Parliament stressed the importance of diversity in covered bonds and avoiding mandatory harmonisation, in a report published on Tuesday that broadly supports a clearer covered bond definition.

Hypo Noe Gruppe Bank stormed back to the covered bond market on Tuesday with a €500m six year deal that drew in a large order book. The deal underscored growing appetite for both Austrian credit and soft bullet covered bond formats, observers said.

Hypo Noe closed a two week roadshow last Friday and has now mandated lead managers for a new €500m public sector Austrian covered bond.

A higher-than-expected take-up of the ECB’s final round of Targeted Longer-Term Refinancing Operations (TLTRO II) could hurt supply in covered bonds, with some analysts downgrading their expectations following Thursday’s announcement of the results.

A new seven year euro deal from Toronto-Dominion Bank drew in a healthy book on Thursday, as investors continue to show strong demand for Canadian names.

PKO Bank Hipoteczny launched the first Polish euro benchmark covered bond of the year on Thursday, with pricing grinding slowly tighter after a steady bookbuilding process.

DNB Boligkreditt’s venture into the dollar market was successful on Tuesday, with the bank drawing almost $2.6bn of demand for the deal, allowing it to pull in pricing below guidance.

Yorkshire Building Society mandated banks for its first covered bond since November 2015 on Wednesday, joining a host of other issuers, as a diverse pipeline of deals builds up.

The FIG primary market made a roaring start this week and looked set to remain busy despite some softness on Wednesday morning.

Three covered bond issuers took advantage of the post-Dutch election window on Tuesday to issue covered bonds in euros and dollars, with some aggressive price tightening seen in the euro market.

Hypo Noe is embarking on the second week of its new deal roadshow this week, as the bank looks to roll out a new soft bullet structure for its covered bonds.

A pair of issuers from Australia and New Zealand have announced they will take new euro deals on roadshows at the end of the month.