Covered Bonds

The recent rise in yields has provided covered bond borrowers from the most expensive jurisdictions like Germany an opportunity to diversify away from the overpopulated 10 year. DG Hyp was the latest issuer to take advantage of this development with its €500m long eight year which was issued on Tuesday.

Bank of China (London) has mandated banks for what is being described as the first green covered bond from a Chinese bank in a transaction that will be backed by climate debt.

NordLB issued a €750m public sector covered bond on Monday which, like the previous German 10 year from Commerzbank, was only just subscribed. The tight initial spread discouraged order inflation and stimulated high quality orders, allowing the borrower to issue more than was initially planned.

Australia and New Zealand Bank has mandated leads for a European roadshow with a view to issuing a euro denominated covered bond or a senior unsecured benchmark, or both. DG Hyp has mandated leads for a long eight year Pfandbrief.

Moody’s has assigned a provisional Baa1 rating to the mortgage backed covered bonds of Yapi ve Kredi Bankasi and the issuer has published its base prospectus, suggesting it could soon be ready to issue.

Raiffeisenlandesbank Niederoesterreich-Wien AG’s public sector backed covered bond programme has been rated Aaa with Moody’s.

Crédit Agricole's rare €500m 10 year public sector Obligations Foncieres was priced at the tightest spread for a French covered bond in more than a year and it was the most highly subscribed in more than 18 months.

The rate of the European Central Bank's covered bond purchases slowed again in the latest reporting period, reflecting a scarcity of secondary market offers and a lack of new supply rather than a deliberate attempt to taper.

Hypo Oberösterreich’s first transaction issued from its newly set up covered bond programme was exceptionally well received, despite its small size and lower than average rating.

The debut covered bond of BNP Paribas Fortis and the first in four years from SNS Bank were priced on Monday with virtually no new issue concessions and healthy levels of subscription.

Polish banks will be anxious to follow PKO Bank Hipoteczny which on Monday enjoyed a superb reception for its euro benchmark covered bond — the first from the country. Bill Thornhill reports.

The Austrian lender’s first transaction issued off its newly set up covered bond programme was exceptionally well received, despite its small size and lower than average rating.