Covered Bonds

Danske Bank returned to the covered bond market on Tuesday to issue a €1bn five year that offered an attractive concession not only to its own curve, but more conspicuously against core covered bonds that, unlike Danske’s deal, are eligible for the European Central Bank’s purchasing programme (CBPP3).

UniCredit Bank Austria returned to the covered bond market on Tuesday to issue the first Austrian Pfandbrief since February. The transaction was well received, and sends a positive signal to other Austrian issuers that had been hit following the Heta debt moratorium. A day earlier Commerzbank priced the first 10 year since April.

Sparebank 1 Boligkreditt adopted a cautious strategy when pricing its new seven year bond on Friday. The borrower offered a defensive high single digit new issue premium which bankers say has led to a repricing of its curve. Rival bankers said could have an affect on the Norwegian supply which is building in the pipeline. However, bankers on the deal said that the impact was minimal and that pricing was in line with other recent issues.

OP Mortgage Bank made a successful return to the covered bond market on Friday, taking advantage of improved market conditions to print a €1bn seven year soft bullet.

After a month-long drought in the euro covered bond market, a minimum of three deals could be priced this week after Crédit Agricole leapt on improved conditions to reopen the market on Thursday.

Crédit Agricole ended a month long euro covered bond drought on Thursday, leaping on improved market conditions to print a €1.25bn six year soft bullet with a minimal new issue concession. Bankers say the deal proves there is plenty of demand and will help to relieve pressure on the pipeline which has been building up this week.

Covered bond bankers could soon be dealing with a new issuer if plans to separate the Norwegian business of SkandiaBanken AB go ahead. Moody’s has assigned a provisional Aaa rating for the new entity which will be known as Skandiabanken Boligkreditt AS.

A member of Royal Bank of Scotland’s covered bond and SSA research team has left the bank.

Euro benchmark covered bond year-to-date supply is the lowest in the last decade as a series of macro events, combined with banks’ increasing focus on bail-in, have kept activity to a minimum.

ING Bank is looking to exchange over €17bn of its covered bonds to soft bullet format having announced a consent solicitation on Monday morning.

Westpac NZ is marketing a new euro-denominated covered bond as another China-related sell off kept primary activity to a minimum on Monday.

ING Bank has updated its prospectus for the second time this year enabling it to issue soft bullet covered bonds. Analysts at ABN research believe this could be a precursor to a hard to soft bullet exchange.