Covered Bonds

The debut Turkish euro-denominated mortgage backed covered bond from Vakifbank, mandated on Thursday, could initially price slightly wider than the sovereign. But over time it should move tighter, said Mustafa Turan, head of international banking at Vakifbank, in a roundtable.

Belgian bank BNP Paribas Fortis has successfully registered its residential covered bond programme with the central bank, suggesting it could soon be ready to issue its first deal.

Covered bond borrowers in the UK, Sweden, France, New Zealand and the Netherlands met with strong receptions for their transactions this week, which collectively raised nearly €6bn.

ABN Amro issued the largest 15 year euro covered bond in a decade and priced it as Bund prices rallied to historic highs, igniting a search for yield.

The euro covered bond market is expected to remain quiet for the remainder of this week but is likely to be active next week. In the meantime, bankers were left mulling ABN’s astoundingly large 15 year and wondering whether others might now be encouraged to follow.

Turkiye Vakiflar Bankasi (Vakifbank) is meeting investors for what could be the first ever international mortgage backed covered bond from Turkey.

Turkiye Vakiflar Bankasi (Vakifbank) is meeting investors for what could be the first ever international mortgage backed covered bond from Turkey.

ABN Amro issued the largest 15 year euro covered bond in a decade on Wednesday with a well oversubscribed, high quality order book. The transaction which is expected to offer a yield of about 1%, was priced as Bund yields hit historic lows, igniting a renewed search for yield.

Cerberus Capital Management’s launch of a £6.2bn UK RMBS deal — the biggest European ABS sale since the financial crisis — has finally lifted the uncertainty that has been hanging over the UK ABS market since the Granite sale process began a year ago, according to market participants.

As of April 4 the ECB said it would make its holdings of covered bonds under the first, second, and third purchase programmes available for repo lending. Covered bond traders said the facility would help improve liquidity, but they did not think it was a game changer.

ASB Finance opened books on Tuesday for the first New Zealand covered bond in euros this year. The New Zealand market is illiquid so fair value is hard to gauge, but the new issue concession was “juicy,” said a lead.

Canadian Imperial Bank of Commerce has appointed leads to update Australian investors and may issue an Australian dollar-denominated covered bond, the first in over a year.