Covered Bonds
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Renewed appetite in the long end of the curve allowed Crédit Agricole Home Loan SFH to add a rare benchmark 20 year covered bond to an offering of eight and 15 year notes on Wednesday, as the French lender walked away with a healthy €2.5bn of funding. -
FIG investors can expect the first round of post-earnings announcement deals in forthcoming sessions, though they have not been left wanting even at the height of blackout season.
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Dealers are already running low on covered bond inventory and with this year’s first rush of new issues now done, a squeeze is already starting to get underway.
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Crédit Agricole has mandated leads for a possible eight and 15 year covered bond which is likely to be launched on Wednesday.
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LBBW has priced the largest Pfandbrief in dollars since October 2013 with a comfortably oversubscribed order book, one of the most granular in years for a German covered bond in dollars.
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Spanish and French covered bonds were well supported on Monday with further buying reported following demand seen last week. With only one Spanish Cédulas seen so far this year, the market should be receptive to more supply.
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LBBW has mandated leads for its first dollar covered bond benchmark of the year. The public sector-backed Reg S transaction is expected to be launched in the near future.
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Almost 18% of this year’s expected covered bond supply has now been issued and it seems likely that the pace in the primary market will begin to moderate. With less new supply, there could be more technical squeezes on the way
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La Banque Postale (LBP) and Axa Bank Europe SCF priced French covered bonds this week. Axa’s may be its last before it restructures its programme.
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SpareBank1 Boligkreditt, Aareal Bank and Nordea took advantage of strong demand for five year paper to issue oversubscribed deals this week, paying virtually no new issue concession.
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Royal Bank of Canada is set to become the first covered bond issuer in Canada to join the Covered Bond Label initiative.
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DBS Bank issued its long-awaited debut euro benchmark this week with a choice of tenor and pricing that worked well for for the Singaporean lender. It may return later this year.
