Covered Bonds

Commerzbank returned with its fourth covered bond deal of the year, and the second off its new mortgage platform. After a plethora of German five and seven year Pfandbriefe, the issuer chose to extend its curve with a rare 10 year.

Abbey National Treasury Services, owned by Spain’s Santander Group, became the first UK issuer since February 2012 to launch a benchmark deal in euros.

Westpac returned to the covered bond market for the second week running. After issuing an A$900m 10 year last week it mandated joint leads Citi, JP Morgan, Royal Bank of Canada and Westpac for a benchmark five year deal on Monday

ING is set to become the third Belgian issuer to offer covered bonds after mandating joint leads to roadshow its inaugural covered bond programme, which has a triple-A rating from Fitch and Moody’s.

BPCE issued the most oversubscribed French deal of the last three years this week, drawing some bankers to conclude that it started price thoughts too wide. But after the anaemic reception of its previous deal, a strong result was needed.

Banca Carige’s five year benchmark launched in mid-October was steady on Thursday, with only small selling, after Standard & Poor’s downgraded the bank, due to its rising non-performing loan ratio and concerns over its capital raising.

New Zealand moved a step closer to a legislative framework for covered bonds when its parliament heard the third and final reading of the Reserve Bank of New Zealand (Covered Bonds) Amendment Bill on Wednesday.

The FIG market is showing its first signs of weakness in quite some time, as investors turn to the yields on offer from higher beta names, leading some other trades to flounder and others still to widen after pricing.

BPCE SFH followed Commerzbank with a 10 year covered bond, but in contrast it offered a very attractive spread to mid-swaps and to OATs and looked set for an eye-catching 2.5% coupon. The deal was announced late in the morning, but it attracted vigorous demand even before the books were open

Sweden's finance minister, Anders Borg may want the country's banks to rely less upon the covered bond market and more upon growing their own deposit bases, but if Swedish banks were to abandon a market that has served them so well for so long, it could do more harm than good.

Bids for core market covered bonds are dwindling, bankers said on Wednesday. However, higher yielding peripheral deals, and all bonds at the long end, remain well supported, though spreads are unchanged.

ING is set to become the third Belgian issuer to offer covered bonds after mandating joint leads to roadshow its inaugural programme, which has a triple-A rating from Fitch and Moody’s.