Covered Bonds

Deutsche Pfandbriefbank is following fellow German issuer Landesbank Hessen-Thüringen (Helaba) into dollar denominated Pfandbrief, after mandating leads for a three year dollar deal on Tuesday.

While the European covered bond pipeline is barren, Australian issuer Suncorp-Metway is lining up a new Australian dollar-denominated 10 year covered bond, continuing its tradition of issuing in its home currency.

With an unreconciled order book of almost €800m, Commerzbank’s €250m negative yielding eight year Pfandbrief tap issued on Friday neatly illustrated the desperation of investors.

With new issue premiums set to rise and spreads prone to soften, the covered bond market could be set for a repeat of last year’s spread widening. But this time supply will be more limited, and any move wider won't last.

Landesbank Hessen-Thüringen (Helaba) priced the third dollar Pfandbrief benchmark of the year and is expected to be followed by a succession of dollar trades later in the year.

The rally in sterling covered bonds still has some way to go. With another UK rate cut likely and negligible supply, spreads should at least halve in the next few months.

The rally in sterling covered bonds still has some way to go. With another UK rate cut and limited supply, spreads should halve in the next few months.

Next week’s Danish covered bond auctions are eagerly awaited by yield-starved foreign investors. The 30 year callable notes offer the highest yields for a triple-A rated credit to be found anywhere.

With new issue premiums set to rise and spreads prone to soften, the covered bond market could be set for a repeat of last year’s spread widening. But this time supply is more limited, and any move wider won't last.

HSH Portfoliomanagement, a wind-down agency for non-performing ship financing loans from HSH Nordbank, has hired banks to run a roadshow that could be followed by a debut syndication.

Landesbank Hessen-Thüringen (Helaba) is expected to price the third dollar Pfandbrief of the year at the tight end of guidance and inside the level it could have achieved in euros.

A lingering aversion to negative yielding covered bonds has caused a slight spread inversion in the Pfandbrief curve and caused supply to move longer. And with concerns over a potential repricing of the market mounting, higher yielding non-Eurozone bonds should offer the least execution risk.