Covered Bonds
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Crédit Agricole braved an uncertain market on Thursday to launch its first covered bond of the year. It was rewarded for its courage with the largest covered bond print in more than a month and a final spread inside its secondary curve, proving that the primary window remains wide open for core issuance.
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Europe’s regulators and politicians are looking to promote covered bonds as much as possible, bankers have told EuroWeek. Draft EU policy proposals, seen by EuroWeek, want covered bonds to be raised to level one assets under Basel III’s Liquidity Coverage Ratio (LCR).
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Covered bonds are set to be counted as level one assets under Basel III’s liquidity coverage ratio (LCR), according to documents detailing agreements on new capital regulations, seen by EuroWeek.
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National Australia Bank has mandated Bank of America Merrill Lynch, Barclays, HSBC, NAB and RBC Capital Markets for a five year dollar covered bond.
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Crédit Agricole braved an uncertain market on Thursday to launch its first Obligations à l’Habitat of the year. It was rewarded for its courage with the largest covered bond print in over a month and a final spread inside its secondary curve, proving the primary window remains wide open for core issuance.
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Korea Housing Finance Corp (KHFC) received over three times the demand it needed to print its latest $500m covered bond this week, drawing a strong response from European buyers, as well as Asian and US accounts.
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Deutsche Pfandbriefbank tapped a recent floating rate mortgage backed covered bond for €150m on Wednesday, although fresh benchmark deals are unlikely in the wake of Italy’s election, said debt bankers. They fear the surge in volatility could close the issuance window for weeks. However, other bankers countered that strong core names would have no trouble bringing transactions.
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Turkey’s financial regulator has approved Denizbank’s plan to sell €300m worth of covered bonds in a private placement this year, which should have the support of several supranational agencies, an official at the issuer told The Cover.
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Korea Housing Finance Corp opened books on its latest benchmark covered bond on Tuesday. It is only the second dollar deal of the year, and this lack of issuance, together with a triple-digit starting spread should mean a successful outcome, said bankers.
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Korea Housing Finance Corp pushed ahead with its latest covered bond on Tuesday, approaching investors with price guidance that offered a small premium to outstanding bonds from the country’s policy banks.
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Covered bond bankers are still hoping for deals this week, despite uncertainties over the quality of order books in recent deals. Meanwhile, the market is waiting for the Italian election results and watching for any delayed reaction to the UK’s rating downgrade.