Covered Bonds

The European Central Bank, the European Commission and the European Banking Authority are pulling in different directions when it comes to covered bonds with extendible maturity structures. Time for a bit of harmonisation.

Swedbank became the third non-UK issuer to launch a sterling covered bond since September with a rare five year offer on Wednesday.

National Australia Bank issued its second dollar benchmark of the year and managed to fund at a slightly tighter level than it could have hoped for in euros. However, the more conspicuous funding advantage is in sterling covered bonds

National Australia Bank has opened books for its second dollar-denominated covered bond of the year and the third in dollars from Australia this year.

Swedbank became the third non-UK issuer to launch a sterling covered bond since September, when it launched a rare five year on Wednesday. The high number of UK bank sterling redemptions that are unlikely to be refinanced next year suggests sterling investors will be cash rich and receptive to similar supply.

The European Central Bank, European Commission and the European Banking Authority are pulling in different directions when it comes to covered bonds with extendible maturity structures. Time for a bit of harmonisation.

The European Central Bank is expected to announce a six month extension of its Covered Bond Purchase Programme when it meets on December 8. However, as the programme may end after that, credit curves could steepen and spreads could widen next year. GlobalCapital spoke to a number of funding officials and other bankers to gauge their views on the topic.

Compagnie de Financement Foncier’s deputy CEO Olivier Avis, and head of long term funding Paul Dudouit, speak to GlobalCapital about the bank’s funding, the end of the ECB's purchases — and how it has issued some of the longest deals ever seen in covered bonds.

Fitch believes the Chinese covered bond market could prove a viable new source of funding for its banks, but suggests that a legal framework would offer a more sustainable approach for the development of the market.

Overseas Chinese Banking Corporation will choose euros as its strategic currency of choice for covered bonds, according to chief financial officer, Darren Tan, who spoke to GlobalCapital along with OCBC group’s chief executive officer, Samuel Tsien.

The European Commission’s package of bank regulation measures, released on Wednesday and now dubbed ‘CRD V’, will ease regulations that threatened to mean ‘game over’ for the European repo market.

Coventry Building Society has mandated leads for a roadshow ahead of a possible €500m seven year covered bond. The announcement follows further rates volatility and the withdrawal of most bids in the secondary market.