Covered Bonds

UniCredit Bank Czech Republic and Slovakia has issued the first benchmark-sized euro covered bond backed by Czech mortgages. The €800m five year hypoteční zástavní listy transaction was preplaced in the local market with a diversified group of investors.

ING Belgium made a successful covered bond debut on Tuesday, attracting a heavily oversubscribed order book from a wide range of investors for its €1bn five year trade.

Tight spreads for outstanding Pfandbriefe from top tier issuers meant the book build for Landesbank Hessen-Thueringen’s (Helaba) €750m four year bond was slow on Tuesday, even after it offered a discount to secondary levels.

Spain is set to follow Turkey and become the second country with a legal framework for issuing bonds backed by SME loans, according to BBVA CIB research.

Average spreads for Danish covered bond auctions, which finished on Wednesday, hit record lows, Danske Bank research said on Thursday. The auctions were heavily influenced by the government’s amended proposal to extend the maturity of bonds from next year.

Co-operative Bank has asked holders of its £600m Moorland covered bonds due November 2021 to vote on an extraordinary resolution.

The bank capital market is ablaze this week, with Barclays’ additional tier one deal on Tuesday being followed by a low trigger tier one trade from Credit Suisse and a rights issue and preference share sale for Bank of Ireland on Wednesday. Covered bonds and ABS have continued apace, but like senior unsecured, those markets are slowing down as Christmas approaches.

Investors have not turned in for Christmas quite yet, but bankers expect few issuers will to try to pre-fund over the rest of December. The success of ING Belgium’s €1bn five year on Tuesday could, however, entice one more Belgian issuer to market before year-end.

ING Belgium made a successful covered bond debut on Tuesday, attracting a heavily oversubscribed order book for the €1bn five year trade.

Bracingly tight spreads for outstanding Pfandbriefe from top tier issuers meant the book build for Landesbank Hessen-Thueringen’s (Helaba) €750m four year bond was quite slow on Tuesday, even after it offered a concession to secondary levels.

Bank of Scotland has bought back €2.92bn and £206m of debt from three euro and one sterling-denominated covered bond, paying a purchase price above par for all four bonds.

Frank Will has left RBS, where he had been head of covered bond and SSA research since May 2005.