Covered Bonds

Northern Rock Asset Management (NRAM) set the early redemption price for its €2bn 3.875% November 2020s. It is looking to buy back all the notes with a tender offer and consent solicitation and will hold a meeting next week.

A triumphant first Grüner Pfandbrief has snapped the covered bond market out of its recent decline, bringing new buyers to a product that many investors abandoned this year as the European Central Bank’s purchases crowded them out, writes Bill Thornhill.

BNP Paribas made an opportunistic move to price the tightest ever 10 year from a French bank on Tuesday. It was also the first 10 year covered bond issued in more than a month.

Bank of Ireland paid a decent 3bp-4bp new issue premium for its seven year covered bond on Tuesday. Despite that, it was the issuer’s least subscribed deal since 2012.

Northern Rock Asset Management (NRAM) will repurchase its €2bn 3.875% November 2020s at 121.494.

The outlook for peripheral covered bonds is still positive, and despite the disappointing result achieved by Bank of Ireland on Wednesday, bankers expect further supply.

Draft Swedish regulation, requiring compulsory repayment of mortgage loans until the loan to value ratio gets below 50%, has been dropped. However, lending practices had already become stricter, so dropping the requirement changes little, said LBBW research on Thursday.

Bank of Ireland has priced the third covered bond from Ireland this year and, in contrast to BNP Paribas which issued a 10 year deal on Tuesday, it paid a decent 3bp-4bp new issue premium for the seven year offering. Despite that, it was the issuer's least subscribed deal since 2012.

The Spanish government has published a new securitization law which is expected to allow issuers to structure covered bonds backed by a segregated pool. The move could spur issuers to consider conditional pass through structures backed by a broad range of assets, said analysts at Moody’s and Société Générale.

Until recently, green covered bonds were always more of a theoretical discussion than one that had taken root. But they could be just what the central bank-oppressed market needs.

Until recently, green covered bonds were always more of a theoretical discussion than one that had taken root. But on Monday, the asset class took a giant leap forward as Berlin Hyp issued its €500m seven year Grüner Pfandbrief, a transaction that was placed with many new types of investor. The deal could be just what the central bank-oppressed market needs.

BNP Paribas made an opportunistic move to price the first 10 year covered bond in over a month on Tuesday via an intraday execution. Strong demand and a book that was twice covered allowed the issuer to increase the size of the deal to €750m from €500m and enabling pricing almost flat to BNP Paribas’ existing curve.