Covered Bonds

La Banque Postale closed a €500m seven year covered bond on Thursday, but bankers away from the deal said the continued influence of ECB purchasing was weighing on investor demand.

DNB Boligkreditt drew over €2bn of orders for its €1.5bn five year covered bond on Thursday, and despite wider volatility the new issue concession was minimal.

Bank of Montreal (BMO) was set to issue a €1.5bn three year covered bond on Thursday after attracting the biggest order book for a Canadian bank in euros in the past year. The borrower’s decision to opt for a short tenor proved the perfect choice in the context of Thursday’s prevailing risk averse and volatile market.

Nordea Eiendomskreditt issued the second sterling three year floating rate covered bond of the year on Wednesday following the earlier success of Lloyds which reopened the market on Tuesday. And after a strong reception for Toronto Dominion’s (TD) euro five year benchmark, Bank of Montreal and DNB Boligkreditt mandated leads for euro denominated transactions to be priced on Thursday.

Caisse Francaise De Financement Local (CAFFIL) raised €1.5bn in the covered bond market on Tuesday with a two tranche public sector-backed deal. The higher yielding €500m 15 year tranche was subscribed, but the €1bn six year was not.

Fitch has published a detailed response to the European Commission’s (EC) consultation on harmonisation of the covered bond market, outlining areas that could provide a material rating benefit in some countries, but adding that a degree of market fragmentation is inherent in the covered bond market.

Landesbank Baden-Württemberg (LBBW) priced a well oversubscribed €750m four year Pfandbrief on Tuesday, paying a minimal new issue concession.

The Toronto-Dominion Bank priced a €1bn five year covered bond on Tuesday, with the issuer able to tighten pricing from initial price thoughts on the back of strong demand for the non-ECB eligible paper.

Lloyds opened the sterling covered bond market on Tuesday with a three year floating rate bond. The deal encouraged another issuer to look to tap the market with the same instrument.

The global head of debt capital markets for financial institutions and public sector issuers at Natixis has left the bank.

LBBW mandated leads for a euro Pfandbrief, and Lloyds mandated for a sterling benchmark on Monday, while another issuer could emerge at short notice. But the primary covered bond market is not expected to pick up properly until next week as a European holiday on Wednesday and US Non-Farm Payrolls on Friday mean the only potential funding window this week is on Tuesday.

The global head of debt capital markets for financial institutions and public sector issuers at Natixis has left the bank.