Covered Bonds

FIG borrowers have wasted little time in bringing opportunistic offerings in front of investors this week, using strong issuance conditions to complete a number of projects ahead of the Easter break.

Delegates attending the 10th annual IMN covered bond conference in London on Tuesday were unperturbed by the possible end of the ECB's covered bond purchase programme (CBPP3).

SR Boligkreditt is set to follow its Scandinavian peers and has mandated leads for its debut Reg S covered bond in dollars.

Yorkshire Building Society issued a €500m six year covered bond almost flat to its curve with strong demand on Monday. At the same time Commonwealth Bank of Australia priced a €750m seven year, a solid trade but one that lacked sparkle.

Yorkshire Building Society could kick-start covered bond issuance in the second quarter, as it lines up to sell its first deal in the format since late 2015.

Westpac NZ issued a chunky €1bn euro covered bond on Thursday, with leads adopting a cautious approach to pricing at first, tightening the deal by 5bp in syndication to reach a record spread for a New Zealand issuer in euros.

Westpac Securities NZ has mandated banks for a new five year euro covered bond after finishing a roadshow this week.

Swedish issuer Stadshypotek is hitting the dollar market for five year covered bond funding on Wednesday, following the success of DNB Boligkreditt’s trade last week.

No banks had issued new senior or subordinated deals in euros or dollars by mid-week, as market participants blamed a heavy take-up in the final round of the European Central Bank’s Targeted Longer-Term Refinancing Operations (TLTRO II).

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.