Covered Bonds

Stadshypotek brought the fourth Swedish covered bond of the year on Monday, landing €1.25bn with a seven year deal.

Berlin Hyp brought a new €500m seven year deal to the primary market on Monday, extending its curve by one year.

Two UK RMBS deals have joined the European ABS pipeline, with Nationwide mandating leads for a new deal from its Silverstone master trust, and Kensington Mortgage Company announcing a £790.5m securitization of UK mortgages purchased from GE Money.

A slight improvement in European markets on Friday morning allowed LBBW to bring a new €500m six year pfandbrief, with bankers surprised by the strength of the deal.

The trend moving away from a potential ‘29th regime’ covered bond harmonisation framework was welcomed by panel members at AFME’s Spanish Funding Conference, held in Madrid on Thursday.

Covered bonds with a conditional pass through structure offer a yield pick up to soft bullet covered bonds, and should be considered an attractive investment despite the criticism the structure has attracted, said a DZ Bank analyst on Wednesday.

An unprecedented sell-off of additional tier one paper led to turmoil across credit and equity markets this week, but a sharp pricing rebound left the FIG market looking much different on Wednesday.

On Monday, a £450m UK prime RMBS deal from Skipton Building Society was priced, with the issuer retaining a large chunk of the senior tranche.

Fitch Ratings and Moody’s Investors Service have both assigned provisional triple-A ratings to Macquarie Bank’s inaugural covered bond, which started its roadshow on Monday.

Weak European equities, the German public holiday and Chinese New Year meant primary issuers sat on the sidelines on Monday, but secondary market activity was more constructive.

Covered bond euro benchmarks issued by banks in the euro area do not fulfil the quantitative requirements of the liquidity coverage ratio, according to new research by Barclays analysts.

The refinancing auctions of Danish non-callable covered bonds for the April term began on Friday, where demand for three and five year non-callable bonds is expected to be strong, said analysts at Danske Bank.