Covered Bonds

Portuguese covered bonds were steady on Friday following news that a Portuguese court had granted a provisional injunction against Bank of Portugal (BdP), and following a concern raised on Monday by Moody’s that Portuguese covered bond holders could lose their priority claim. The news emerges as DBRS decides on Friday whether to maintain its investment grade rating on Portugal, without which government bonds would not qualify for the ECB’s purchase programme.

The dollar denominated covered bond market has tightened further this week maintaining its long term trend. Funding levels are now looking more interesting for a number of regular dollar denominated covered bond issuers that have yet to make an appearance this year.

The Financial Conduct Authority (FCA) has outlined plans to speed up approvals for wholesale debt issues listed in London, a change which it hopes will particularly benefit borrowers from outside the EU, and ABS and covered bond issuers.

Türkiye Vakiflar Bankasi, or VakifBank, this week issued the first publicly syndicated Turkish covered bond, sending a powerful message to other Turkish banks and emerging market issuers that the investor base is wide open and eager for more EM names.

Vakifbank’s debut euro Turkish covered bond is good for investors, good for emerging markets borrowers and good for the global economy. But the deal would probably never have happened without the intervention of the European Central Bank.

Türkiye Vakiflar Bankasi, or VakifBank, this week issued the first publicly syndicated Turkish covered bond, sending a powerful message to other Turkish banks and emerging market issuers that the investor base is wide open and eager for more EM names.

Berlin Hyp has increased the volume of mortgages eligible for its Grüner Pfandbrief, or Green Pfandbrief, by more than 50%, suggesting a second deal from the lender could soon be on its way.

German bonds may be the tightest asset class in the covered universe, but their relative value has improved lately and the market looks cheap relative to Bunds and French covered bonds, say analysts at Citi research.

Moody’s has favourably adjusted its Asia Pacific covered bond rating assumptions with respect to the likelihood of a payment interruption and the ability of banks to refinance bonds. The changes should lead to less rating volatility and more efficient funding structures.

Periphery bank capital is back on the menu for investors this week, leaving FIG bankers feeling they can bring virtually any product to market for the first time since early January. And thanks to Vakifbank, that now includes Turkish covered bonds.

Vakifbank’s euro Turkish covered bond is good for investors, good for emerging markets borrowers and good for the global economy. But the deal would probably never of happened without the intervention of the European Central Bank.

Vakifbank’s debt euro Turkish covered bond is good for investors, good for emerging markets borrowers and good for the global economy. But the deal would probably never of happened without the intervention of the European Central Bank.