Covered Bonds

The Bank of Queensland’s (BoQ) debut Australian conditional pass through (CPT) covered bond will mark a major step in the use of the structure, with cross-currency swaps used for the first time.

The lender has mandated leads for a triple A-rated €500m no grow covered bond backed by mortgages, its first rated benchmark and the fifth deal from Austria this year.

Berlin Hyp opened books for a €500m seven year green transaction on Monday, as it looked to become the first bank to offer green bonds in two asset classes.

The fledgling green covered bond market is likely to be a promising growth area, with efforts to standardise eligible mortgage loans expected to pave the way for lenders across Europe to issue deals, said panellists at Thursday’s Euromoney covered bond conference.

GlobalCapital is delighted to announce the winners of The Cover Awards 2016 to mark the successes of those in the covered bond market over the last year. The awards were presented in Düsseldorf last week at the Euromoney/ECBC Covered Bond Congress. Congratulations to all the winners, commiserations to the runners-up and thanks to all who took part.

Tightening spread levels are pushing all covered bond issuers towards negative yielding deals but some are more willing to resist the trend than others, attendees heard at the Euromoney/ECBC covered bond congress in Düsseldorf on Thursday.

The European Banking Authority is expected to deliver a report to the European Commission before the end of this year recommending a principles-based directive on harmonising covered bonds, said panellists at the European Covered Bond Council’s plenary session on Wednesday.

Punitive Basel IV proposals related to the capital charge on mortgages and the treatment of specialist mortgage banks could be amended more favourably for lenders, said regulators and industry insiders at the European Covered Bond Council (ECBC) plenary meeting in Düsseldorf.

Panellists at the ECBC plenary conference in Düsseldorf on Wednesday unanimously agreed that covered bond liquidity was poor, but some were keen to stress that it was not just the result of heavy central bank buying.

ANZ New Zealand took advantage of a slight back-up in yields and a scarcity of seven year covered bonds to issue a well oversubscribed deal on Tuesday.

Bank of Nova Scotia returned to the covered bond market for the second time this month and the sixth time this year, opening books for its second dollar benchmark of 2016 and the fifth from a Canadian issuer.

Five covered bond deals were launched on the Monday preceding last year’s ECBC/Euromoney covered bond conference. The surfeit of supply caused spreads to widen which is unlikely to happen this year. But events away from covered bonds could still send the market wider.