Covered Bonds

Vorarlberger Landes-und Hypothekenbank (Vorhyp) pulled in a lot more demand for its seven year covered bond on Wednesday than De Volksbank was able to muster for a lower-rated 10 year.

Banks dived into the primary market on Wednesday, following Emmanuel Macron's victory in the French election and as reporting season passed its busiest point. Borrowers are looking to follow a recent string of new deals that have been priced with close to no new issue premium.

Two Austrian banks and a Dutch bank have mandated leads for covered bond deals taking the number of banks in the covered bond pipeline to six.

After a five year absence, Royal Bank of Scotland returned to the covered bond market on Tuesday selling larger than expected and well oversubscribed sterling and euro benchmarks that were priced tight to fair value.

Compagnie de Financement Foncier attracted the largest order book in over two years for a deal of its size when it issued a €1.5bn 5.5 year Obligations Foncières on Tuesday. The deal was priced through fair value causing CFF's older bonds to reprice.

Legislators in the Czech Republic and Austria are in the process of updating their covered bond laws and Lithuania has set out its intention to introduce a framework.

Compagnie de Financment Foncier (CFF) has mandated leads for a five year covered bond, taking advantage of positive sentiment that has followed French presidential elections.

Barclays has mandated itself for a roadshow and plans to issue its first sterling covered bond in more than two years.

Danske Bank is restructuring its Finnish subsidiary in a move similar to Nordea’s last year and has requested investors’ consent to change terms, which will not have a rating impact, in return for a 10bp fee. The change could prevent the issuer from returning to the market soon.

KA Finanz’s plans to convert into a wind down institution will strengthen its link to the Austrian state, but uncertainty over the regulatory and credit rating status of its covered bonds could cause its spreads to widen, said analysts this week.

Kommunalkredit has invited noteholders to tender a trio of Swiss franc covered bonds.

Sparebanken Sør Boligkreditt has mandated joint leads for a roadshow to market its second euro covered bond.