Covered Bonds

Piraeus Bank has become the third of the four largest Greek banks to update its covered bond programme in what is likely to be a prelude to issuance.

The covered bond primary market was kept busy this week as a trio of German banks supplied the market in euros and dollars across a range of maturities.

The conditional pass through (CPT) covered bonds issued by Aegon Bank should trade tighter than other Dutch CPTs, say analysts at Commerzbank research. Bankers say all CPT Dutch bonds should perform, as they are one of a few in core Europe that still offer a positive spread to mid-swaps.

Piraeus Bank has become the third of the four largest Greek banks to update its covered bond programme in what is likely to be a prelude to issuance.

Nykredit, the Danish lender, has improved its loss absorbing capacity and rating outlook with new ‘tier three’ instruments that are expected to replace maturing junior covered bonds.

The Eurosystem purchased fewer covered bonds last week than a week earlier reflecting a slowdown in primary activity twinned with increasing difficulty sourcing bonds in the squeezed secondary market. This has been most conspicuously felt at the long end of core markets where positive yields may soon disappear.

The Basel Committee on Banking Supervision has updated its framework for the regulatory capital treatment of securitization. The reduction in minimum capital requirements for deals that meet “simple, transparent and comparable” (STC) criteria will bring the risk weight into line with covered bonds.

The covered bond primary market was kept busy on Tuesday with two Pfandbriefe issued in euros and dollars at the opposite ends of the curve. Though market conditions are constructive, bankers are concerned that the outlook will not look as pretty after the summer break.

Muenchener Hypothekenbank has mandated leads for a three year dollar-denominated Reg S mortgage-backed covered bond, the second from a German issuer this year.

Only one or two transactions are expected in the first half of this week but with many issuers in blackout supply prospects are set to remain dim exacerbating a technical squeeze.

Please take a look at this year’s shortlists before casting your votes for The Cover Awards 2016.

Canadian Imperial Bank of Commerce has tapped its three year sterling covered bond at a tighter spread than it was initially priced and in a considerably larger size than the minimum it had planned.