Covered Bonds

South Korea’s Kookmin Bank issued its second ever covered bond this week, raising $500m from a five year note that was more or less a replica of its debut transaction.

AIB Mortgage Bank attracted robust demand for its €1bn seven year covered bond issued on Thursday, and WL Bank also did well despite the difficult 10 year tenor and measly spread.

UK Asset Resolution, the UK government’s holding company that has owned the mortgage book of Bradford and Bingley (B&B) since its nationalisation in September 2008, has announced a tender offer and early redemption of the issuer’s covered bonds.

Commonwealth Bank of Australia (CBA) funded itself more cheaply with a 15 year covered bond than it did with a five year this week. It followed Swedish Covered Bond Corporation (SCBC) which issued at the same spread as earlier deals despite a market widening.

AIB Mortgage Bank attracted robust demand for its seven year covered bond, the first deal from Ireland this year. The transaction benefitted from a very attractive spread to the government curve compared with deals issued by Spanish and Italian banks, and the return of demand from asset managers.

Kookmin Bank was set to open books for its second dollar-denominated legislative covered bond on Thursday.

UK Asset Resolution, the UK government’s holding company that owns the mortgage book of Bradford and Bingley (B&B) following its nationalisation in September 2008, has announced a tender offer and early redemption of the issuer’s covered bonds.

South Korea’s Kookmin Bank is looking to price its second covered bond on Thursday, while HNA Group is out to tap its existing dollar notes that were issued two months ago.

Toronto Dominion Bank opened books for the fourth three year floating rate sterling benchmark of the year and was set to price the deal at the widest spread of the year. Kreissparkasse Koeln has announced a sub-benchmark sized eight year Pfandbrief.

Commonwealth Bank of Australia has successfully issued the first euro covered bond from an Australian bank in nearly 12 weeks. Swapped back into Australian dollars the 15 year tranche provided cheaper funding than the five year.

Established covered bond investors are often sceptical about conditional pass through deals. The structure allows the maturity of their investments to be extended, perhaps by decades. But they could be safer than long dated bullet deals.

Established covered bond investors are often sceptical about conditional pass through deals. The structure allows the maturity of their investments to be extended, perhaps by decades. But they could be safer than long dated bullet deals.