Covered Bonds

Compagnie de Financement Foncier has mandated leads for the first French covered bond since mid-June, the bank’s fourth this year and the sixth 10 year in two weeks.

The first week of September is typically a busy week in covered bonds and its likely next week will not disappoint.

Raiffeisenlandesbank Oberösterreich has mandated joint leads for its first benchmark euro covered bond and the Bank of Queensland has hired leads to explore options for a potential structure.

Covered bond investors believe new issue premiums will probably rise in the near future leading to a repricing of the market. But with buyers anxious to put their glut of cash to work in almost anything, the prospective move is likely to prove moderate.

DNB Boligkreditt issued a larger than average euro benchmark 10 year covered bond at a spread that was arguably flat to its curve this week, showing solid demand for non-Eurozone deals that still offer a substantial pickup to core markets.

After a strong start to this year some bankers are beginning to question whether the volumes over the remainder of the year are too optimistic.

Covered bond investors believe new issue premiums will probably rise in the near future leading to a repricing of the market. But with buyers anxious to put their glut of cash to work in almost anything, the prospective move is likely to prove moderate.

HSBC and Nordea looked to reopen euro issuance for FIG borrowers this week, as investors showed strong appetite for riskier and higher yielding debt after the summer period.

DNB Boligkreditt issued a larger than average euro benchmark 10 year covered bond on Tuesday at a spread that was arguably flat to its curve illustrating solid demand for non-Eurozone deals that still of a substantial pick-up to core markets.

Raiffeisenlandesbank Oberosterreich has mandated joint leads for its first benchmark euro covered bond.

The universe of active covered bond issuers is set to further expand with the Bank of Queensland hiring leads to explore options for a potential covered bond structure.

The outlook for euro-denominated primary covered bond volumes may be revised lower over the course of this year as cheap dollar senior unsecured funding and negative euro yields hinder prospects.