Covered Bonds

Regulations that have heavily favoured covered bonds over the European securitization market, and that have little foundation in prudential risk, are storing problems for the future. A report published on Tuesday by the Dutch central bank illustrating the regulatory desecration of the securitization market shows that nothing has changed.

Covered bonds have become a larger source of funding for Dutch banks than securitisations, according the Dutch central bank.

Crédit Agricole reported on Tuesday that it had bought almost as many covered bonds as it sold in last week’s dual tranche issue, and has therefore kept its funding structure stable.

Van Lanschot Bankiers managed a smooth execution for its second ever covered bond deal on Tuesday, a transaction that was at risk of being postponed after attacks in Brussels.

Polish banks, hoping to take advantage of the new covered bond law which came into effect this year will need to work hard to overcome investor concerns regarding their Swiss mortgage loan exposures, which Moody’s said would significantly undermine investor confidence.

Van Lanschot Bankiers announced its intention to proceed with a conditional pass through deal on Tuesday and, following Credit Agricole’s recent 15 year, and a string of well performing peripheral deals, another opportunistic issuer could be tempted to move at short notice with a deal at the long end of the curve.

Coventry Building Society's newly issued Godiva Mortgages RMBS offered almost three times the spread of its sterling covered bonds.

Natixis has appointed its new global head of debt capital markets for financial institutions.

Crédit Agricole issued the biggest euro covered bond benchmark since 2007 this week, achieving a competitive cost of term funding at historically cheap rates. Apart from the ECB’s new stimulus measures which helped demand, the deal size was somewhat enlarged by the bank’s recent tender according to Nadine Fedon, CEO of Crédit Agricole Home Loan SFH.

Two or three covered bonds could surface in the first half of next week, but with holidays in Scandinavia and Spain on Thursday and Friday, most issuers are looking to the start of the new quarter where they hope to take advantage of the fresh money that is expected to be put to work.

The head of covered bonds origination has left RBC Capital Market

Intesa SanPaolo captured the robust improvement in peripheral market sentiment following the European Central Bank’s meeting last week with its €1.25bn seven year.