Covered Bonds

Royal Bank of Canada demonstrated the health of the primary covered bond market on Friday when it priced a €1.5bn deal that offered a minimal new issue concession. And with only one week to go before the European Central Bank’s policy meeting, other issuers will be keen to join apoBank, which mandated leads for a deal.

Torsten Elling will not be returning to Barclays, having been on paternity leave since June last year, GlobalCapital understands.

Covered bonds, the ‘all weather asset class’, have been a haven of stability for issuers amid volatility in credit markets in recent weeks. But the repricing in the market, driving spreads out to attractive pre-CBPP3 levels, has also drawn back investors who many feared had left the market.

Covered bonds, the ‘all weather asset class’, have been a haven of stability for issuers amid volatility in credit markets in recent weeks. But the repricing in the market, driving spreads out to attractive pre-CBPP3 levels, has also drawn back investors who many feared had left the market.

RBC hit the market on Thursday with a sterling-denominated three year floating rate note, becoming the third Canadian issuer to do so this year.

The covered bond market saw a five year euro deal from Nationwide on Thursday, which was priced broadly in line with expectations.

Banco Popular Espanol saw strong demand for its six year benchmark deal, with the €1.5bn deal offering investors pick up to the Spanish government curve and a decent new issue premium.

Comfortable oversubscription levels and price tightening were seen in both CBPP3 eligible and non-eligible paper on Wednesday, with Hamburger Sparkasse pricing its first euro benchmark and Norwegian issuer Sparebanken Vest Boligkreditt landing a €500m five year deal.

Belgian issuer KBC returned to the covered bond market for the first time since April last year with a six and a half year soft bullet Pandbrieven. The €1.25bn deal generated the largest book size seen in recent memory in what was described as a ‘phenomenal’ investor response.

UniCredit’s German subsidiary HypoVereinsbank (HVB) landed its biggest benchmark deal in almost five years on Tuesday, with a six year mortgage Pfandbrief.

Sparebanken Sør Boligkreditt has mandated leads for a European investor roadshow in early March, which could result in the issuer’s debut euro benchmark covered bond.

Deutsche Pfandbriefbank was the only issuer in the covered bond primary market on Monday, raising €500m with a six year Pfandbrief.