Covered Bonds

Sparkasse Hamburg extended its curve and priced a Pfandbrief inside fair value with good demand this week. At the same time Hypo Tirol paid a relatively small concession for its sub-benchmark Pfandbrief, suggesting any lingering concern over Austrian covered bonds following the Heta saga has been put to rest.

Kommunalkredit Austria AG said on Monday that it had accepted all validly tendered bonds following its offer published May 4.

Hamburger Sparkasse has mandated joint leads for its second publicly syndicated Pfandbrief which is expected to be launched on Tuesday.

The list of Norwegian covered bond issuers entering the euro market continues to grow with Møre Boligkreditt (Morebo) mandating joint leads to roadshow its deal in the single currency.

Barclays has priced the tightest sterling covered bond since January 2015 and attracted more demand than for any sterling covered bond ever issued.

The primary covered bond market is expected to be active next week with four or five deals potenitially surfacing, in addition to the five being actively marketed. But non-eurozone bonds are being better offered, and the global interest rate outlook is becoming less accommodative.

Royal Bank of Scotland this week gave capital markets the clearest view yet of how banks are set to re-engage with the covered bond market as a staple source of financing, as the sector comes under pressure to wean itself off the special fundings schemes set up by the Bank of England and the European Central Bank.

Rabobank plans to roadshow its debut covered bond next week, while Banco Comercial Portugues will begin marketing a deal after an eight year absence. And after publishing an offering circular this week, Bank Queensland (BOQ) is expected to announce its first deal soon.

Westpac enjoyed a strong covered comeback for a two part euro offering on Thursday and, despite concerns about the performance outlook for non-eurozone bonds, the transactions were priced with barely any concession.

Rabobank has mandated leads to take its debut covered bond on the road. Covered bonds will improve Rabobank’s net interest margin and help diversify its investor base, the bank’s global head of long term funding, Sjaak-Jan Baars, told GlobalCapital.

The Bank of Queensland (BOQ) has published an offering circular for its newly established covered bond programme rated triple-A with Fitch and Moody’s, suggesting a roadshow could soon be announced for the first Australian conditional pass-through covered bond.

After Banco Santander Totta broke the two year Portuguese covered bond hiatus with a well performing seven year in April, Banco Comercial Portugues has mandated leads for its first covered bond since 2009.