Covered Bonds

Turkish banks finally look set to become part of the covered bond market this year as Akbank lines up its first euro-denominated benchmark.

UniCredit Czech and Slovakia has set the final spread for the first covered bond to be backed by a mix of Czech and Slovakian mortgages. The bond has been expected since the borrower first met investors on a roadshow in November.

UniCredit Czech and Slovakia has set the final spread for the first covered bond to be backed by a mix of Czech and Slovakian mortgages. The bond has been expected since the borrower first met investors on a roadshow in November.

Turkish banks finally look set to become a feature of the covered bond market this year as Akbank lines up its first euro-denominated benchmark. The bank still needs to finalise its cross currency swap arrangements, a funding official told The Cover, but a deal could emerge in a matter of weeks not months.

Société Générale issued and retained over €5bn of covered bonds, spread over eight deals with maturities between six and 15 years on Monday. The supply provides contingency backstop liquidity for the bank, and forms a normal part of its liquidity management activity.

The mortgage cover pool backing Aareal Bank’s Pfandbriefe is expected to grow by roughly a fifth following its integration with the assets originated by Corealcredit, according to Commerzbank research analysts. The German exposure will rise, as will the proportion of residential loans.

UniCredit Czech Republic and Slovakia has returned to the covered bond market after first roadshowing in November. The bank has mandated two leads this time round and will be hoping to capture an international investor base with the first covered bond to be backed by a mix of Czech and Slovakian mortgages.

Sparebanken Vest Boligkreditt priced the first Norwegian covered bond of 2015 flat to its existing curve on Wednesday. The deal illustrates that rare issuers from core regions are still able to get superb execution despite the more skittish tone in credit markets lately.

KBC priced its second €1bn covered bond of the year on Wednesday, this time opting for a 2021 which fits neatly into the borrower’s maturity profile and dips into mid-swaps negative territory for the first time. The deal also priced almost flat to its curve.

Van Lanschot Bankiers printed its inaugural conditional passthrough covered bond on Tuesday. A good quality book and a well flagged deal helped the issuer price flat to NIBC’s recent trade. Bankers said it paid a minimum market entry premium to make a successful debut.

The issuance of longer dated covered bonds in the first quarter compared to any other time in the past four years is credit positive according to Moody’s. This is because longer dated supply reduces the mismatch between assets and liabilities and lowers the probability of a fire sale, said the agency on Monday.

The covered bond primary market is expected to maintain momentum on Wednesday as books for the first deal from Norway and the third from Belgium are expected to open.