Covered Bonds

Moody’s has assigned a provisional Aaa rating to Stadshypotek’s Danish covered bond programme. The issuer has three other programmes backed by Finnish, Swedish and Norwegian collateral. All four programmes are established under Swedish law.

Although many banks are emerging from blackout period, which is usually a positive for supply, several key central bank meetings could deter some issuers. Nevertheless, the recent rise in yields should lead to a re-opening of shorter maturity segments.

Fitch updated its covered bond rating criteria following a market consultation. Though the majority of ratings are left unchanged, there will be nearly four times as many upgrades as downgrades.

UBS announced that it has received the consent of investors to change the maturity terms of its covered bonds from hard to soft bullet.

Norddeutsche Landesbank (NordLB) and Deutsche Genossenschafts-Hypothekenbank (DG Hyp) issued tightly priced German Pfandbriefe that benefitted from a rise in yields this week.

Crédit Agricole issed a rare €500m 10 year public sector Obligations Foncières this week that was priced at the tightest spread for a French covered bond in more than a year and was the most highly subscribed in more than 18 months.

Australia and New Zealand Bank has mandated leads for a European roadshow in what will be its first covered bond in two years, while Turkey's Yapi Kredi's first covered bond series was assigned a rating by Moody's.

BRFKredit weathered a sharp rise in Bund yields on Thursday to price a €750m 10 year covered bond that was well oversubscribed. More Scandinavian supply is expected next week, particularly after Moody’s rated Stadshypotek’s new Danish cover pool, but investor interest could start shifting to shorter tenors.

Bank of China is gearing up for another milestone as it starts marketing China’s first green covered bond. While the structure of the dual recourse notes is unlikely to appeal to traditional covered bond investors, the trade underpins Beijing’s commitment to lead innovation in socially responsible financing. Lorraine Cushnie reports.

The secondary market was a little weaker on Wednesday, in line with credit sentiment, but overall conditions were supportive and the market is expected to remain receptive to the mini-wave of likely supply as issuers emerge from blackout.

The European Central Bank is “reaching the limits” of its covered bond purchase programme (CBPP3) according ECB board member Ewald Nowotny, but that does not mean it is about to stop buying.

The European Central Bank has reached the limits of its covered bond purchase programme (CBPP3), according to board member Ewald Nowotny. His remarks reflect the difficulty the ECB is having sourcing bonds, but do not mean the programme is about to end.