Covered Bonds

Sparebanken Vest Boligkreditt (SVB) returned to the covered bond market after an 18 month absence to issue a no-grow €500m five year that was priced flat to its curve.

NIBC’s pass-through covered bond, which has been successfully registered with the Dutch central bank and will be compliant with CRD and Ucits, should attract investors, according to ABN Amro research. But they could have to wait an extra four years to be repaid if the pass through is triggered, a level of uncertainty that should be manageable said the analysts.

BPCE has raised €1bn, avoiding paying a new issue premium while funding well inside levels that prevailed even a month ago. But with volatility likely to rise and more supply expected, investors have been careful not to inflate their orders, which will be filled in full.

Covered bond investors, issuers and index providers are set to thrash out what exactly constitutes a covered bond. The covered bond market is evolving rapidly and the Covered Bond Investor Council said it wants to keep pace with new developments. It is setting up a working group to look at existing and newly innovated covered bond structures.

Standard & Poor’s and Fitch have both assigned top ratings to NIBC’s conditional pass-through covered bond. The issuer has privately placed a small amount of bonds and is expect to publicly distribute them, according to S&P.

Sparebanken Vest Boligkreditt (SVB) returned to the covered bond market on Wednesday, after more than 18 months away, issuing a no grow €500m five year that was priced flat to its outstanding curve.

La Banque Postale (LBP) has attracted the second highest oversubscription of any French covered bond issued this year, proving that most investors had very good credit line availability for this well prepared, inaugural deal from one of France’s highest quality issuers.

Bank Austria has tapped an outstanding five year by less than the maxmum it had targeted. But leads did not think any conclusion could be drawn from this.

Credit Mutuel CIC and AIB Mortgage Bank both launched covered bonds on Tuesday. The French transaction offered a larger new issue premium and attracted greater demand, but this came from a much narrower range of investors than the Irish deal, which larger investors spurned due to country limits.

The covered bond market will benefit from the UK regulator’s changes to eligible securities for bank liquidity buffers, according to Barclays research, but it has warned many questions remain about the new rules.

Banco Popular Español returned to the covered bond market for the second time this year and reduced its reliance on retained issuance to bring a four year Cédulas, that was increased from €500m to €750m. Despite being barely oversubscribed and overly reliant on the domestic bid, the book was granular.

The European covered bond market finished on a stable but quiet note this week. Fresh supply could emerge early next week, particularly from the periphery. Geopolitical risks remain but have been pushed back a little, so prospective issuers might want to move sooner rather than later, bankers told The Cover.