Covered Bonds

National Bank of Canada extended its euro curve by two years and priced its second euro covered bond, a €1bn seven year benchmark, on Tuesday. It looked cheap versus its previous deal, but fair value to where other Canadian transactions were trading on Tuesday.

AIB Mortgage Bank enjoyed a stellar response to its first covered bond of the year. The deal attracted the highest level of oversubscription for any Irish covered bond since the Irish government’s bail-out of its banks, pricing with a double-digit spread over mid-swaps, and with no new issue premium.

Deutsche Pfandbriefbank (Pbb) returned to the covered bond market on Tuesday to issue a €500m five year benchmark. The book attracted over €1.1bn of demand, a stronger performance than the disappointing eight year benchmark that it priced in January.

DBRS published a comment on Thursday comparing conditional pass-through covered bonds with securitizations. Investors in conditional pass-through structures must monitor the underlying assets, cash flows and extension risk more carefully than those investing in bullet maturity structures. Investors must therefore be more skilled in credit analysis.

This week’s suite of covered bond deals have performed well and underscore that the market is receptive. AIB Mortgage Bank’s transaction was clearly the star of the show with its bond trading 10bp inside reoffer and its whole curve 3bp to 4bp tighter on Thursday paying little heed to bearish overnight comments from the Federal Reserve’s chair, Janet Yellen.

Swedish lenders should set a 70% loan to value cap for interest only mortgages and loans higher than that should be on a repayment plan, the Swedish Bankers’ Association said on Wednesday. Investors welcomed the news but said it would have a marginal effect. The Riskbank's governor, Stefan Ingves, said on Wednesday that mortgage risk weights should rise.

AIB Mortgage Bank enjoyed a stellar response for its first covered bond this year. The deal attracted the most demand for any Irish covered bond since the Irish government’s bail-out of its banks.

National Bank of Canada extended its euro curve by two years and priced its second euro covered bond, a €1bn seven year benchmark, on Tuesday. It looked cheap versus its previous deal, but fair value to where other Canadian transactions were trading on Tuesday.

AIB Mortgage Bank has mandated leads for a seven year covered bond to be launched on Wednesday, subject to market conditions. Meanwhile, Aktia Bank has picked leads for a covered bond roadshow starting next week.

Deutsche Pfandbriefbank (Pbb) returned to the covered bond market on Tuesday to issue a €500m five year benchmark. The book attracted over €1.1bn of demand, a stronger performance than the disappointing eight year benchmark that it priced in January.

A Danish covered bond legal amendment, expected to come into force on April 1, is credit positive for Danish mortgage banks, Moody’s said on Monday.

Deutsche Pfandbriefbank (Pbb) mandated Dekabank, DZ Bank, Natixis, NordLB and UniCredit on Monday to lead manage a €500m five year mortgage backed Pfandbrief.