Covered Bonds

Møre Boligkreditt found strong demand for its first euro covered bond which, because of its sub-benchmark size, offered substantially more spread than similar bonds. At the same time BayernLB said it would start a roadshow for a sterling senior unsecured and covered bond.

BPCE outplayed OP Mortgage Bank in the covered bond market on Tuesday with a €1bn 12 year that benefited from the steepness of the French curve and an eye-catching double-digit spread.

Investors, issuers and bankers came together in April for the GlobalCapital/Crédit Agricole CIB covered bond roundtable to discuss the key factors facing the market over the next 12 months.

Turkish legislation has been in place for years and six borrowers have set up covered bond programmes, but so far supply has proved fleeting. Nevertheless, delegates at the CEE Covered Bond Forum in London heard this week that the challenges that held the market back are likely to disappear soon.

Moody’s covered bond ratings are now almost as lenient as those of DBRS, which shouldn’t weaken faith in either agency — arguably, it is Fitch and S&P that have lagged behind. But as the ECB stops buying, trust in ratings will be all the more important.

Sparebanken Sør Boligkreditt and Société Générale enjoyed solid receptions for their covered bonds this week, with the Norwegian issuer pricing flat to its curve.

Investors flocked to Rabobank’s first covered bond on Monday even though it was was priced tighter than any other non-German deal by a considerable margin.

The triumphant return of Banco Comercial Português to the covered bond market this week after an eight year absence marks a turning point, not just for the bank but the Obrigações Hipotecárias market as a whole.

Amended Slovakian covered bond legislation, set to come into effect in January 2018, will lay the foundation for a robust internationally focused market leading to greater volume, delegates at the CEE Covered Bond Forum in London heard this week.

Secondary markets were trading stably on Wednesday, and although non-eurozone bonds were better offered, dealers expressed confidence that spreads would squeeze tighter over the summer months.

Public holidays will cut short the issuance window at the end of May, but banks have enjoyed a busy month and a flurry of deals have arrived in the market this week.

Banco Comercial Portugues returned to the covered bond market after an eight year absence on Tuesday, selling a €1bn five year deal.