Covered Bonds

Finland’s Aktia Bank mandated leads on Monday for its first covered bond, a deal that Moody’s has provisionally rated Aaa.

Denizbank launched and priced the first tranche of its SME-backed covered bond on Thursday with three supranational agencies, the borrower confirmed to EuroWeek.

Raiffeisen-Landesbank Steiermark built a solidly oversubscribed book for the only the second 15 year covered bond of the year, enabling leads to price inside guidance in what they said was still an issuers’ market, despite the more volatile macroeconomic backdrop.

Banco Santander Chile is expecting to issue the first ever covered bond from the Andean country in July, aiming to create a liquid market that can support one of the most developed mortgage markets — estimated at around $45bn — in emerging economies.

Sparebank 1 Boligkreditt opened books for a €1bn seven year covered bond backed by Norwegian residential mortgages on Tuesday.

Deutsche Hypothekenbank (Deutsche Hypo) took advantage of a ratings lift from Moody’s to launch a €500m seven year mortgage Pfandbrief into a quiet primary market on Monday, despite the uncertain macro-economic backdrop that has caused fixed income volatility.

Covered bonds backed by loans to small and medium-sized enterprises (SMEs) are gaining traction as a funding tool for European banks and could soon become a feature in Italy, Spain and France, according to Moody’s.

Covered bond deals stormed back to centre stage this week, as issuers faced up to the likelihood of continued market volatility and decided to fund while levels remain historically tight. With covered bonds coming under increasing pressure in the secondary market, a clutch of names reached the conclusion that it made sense to come sooner rather than later, writes Bill Thornhill.

Scotiabank filed for SEC registration this week, increasing the likelihood of other issuers filing programmes with the SEC, a US lawyer told The Cover on Thursday.

Covered bonds backed by loans to small and medium-sized enterprises (SMEs) are gaining traction as a funding tool for European banks and could soon become a feature in Italy, Spain and France, according to Moody’s.

Cover pool encumbrance was steady last year versus the previous year, Fitch said on Thursday. The most stable levels were among the most encumbered institutions, where covered bonds have made up a large share of their financing for a long time.

Denizbank launched the first tranche of its SME-backed covered bond on Thursday, and placed the bonds with three supranational agencies.