Covered Bonds

Credit Mutuel Arkéa issued a covered bond for the first time since June 2013 on Wednesday, but despite its rarity, it was compelled to offer a wide spread given the weak market conditions.

Covered bonds are the only asset class to have provided investors with a positive total return this year according to the independent index provider, Markit. However this positive picture is somewhat counterbalanced by data from e-trading platform, MarketAxess, which shows traded volumes are down sharply.

Deutsche Kreditbank just managed to raise €500m of eight year funding on Tuesday with a public sector pfandbrief. The transaction only just managed to get over the finishing line but in the current ‘dull and shaky’ market conditions, this was good enough.

Four covered bonds have been issued so far this week, but only one deal from Sparebanken Vest Boligkreditt was comfortably oversubscribed. The choice of tenor, deal size and generous spread ensured a solid reception, despite tough market conditions — which Credit Mutuel Arkea will face on Wednesday when it is expected to opens books for another covered bond.

Morgan Stanley has bulked up its FIG DCM team with a new hire from Crédit Agricole CIB.

Bank of Montreal (BMO) returned to the covered bond market for the fourth time this year to issue its third benchmark in euros. At seven years, the tenor was longer than the borrower’s previous two benchmarks, but at €1bn it was considerably smaller even with a wider spread.

Stephan Dorner has left his job as covered bond and SSA analyst at the French bank for a new gig at Morgan Stanley.

Stephan Dorner has left his role as covered bond and SSA analyst at the French bank.

The Norwegian bank has mandated leads for its second covered bond of the year, to be launched on Tuesday.

The Cover Awards Dinner, held at the Casa Llotja de Mar in Barcelona on Thursday September 10, recognises excellence in the industry. The winners, as voted for by the market, are listed below.

The first Brazilian covered bond could be issued as early as next year as the development of the market continues. The central bank is working to have the necessary regulation in place by the end of the year, said experts at the ECBC/Euromoney congress in Barcelona.

The European Central Bank amended its collateral rules last week to allow banks to post non-marketable collateral for its regular monetary operations, as long as it is packaged in covered bond-style dual recourse instruments.