Covered Bonds

After postponing its inaugural deal in early May, Global bank has once again returned to the covered bond market and has mandated joint leads for the first Panamanian covered bond. Chile, meanwhile, has had another attempt at putting together a covered bond law.

Markit is expected to unveil a new tradable liquid covered bond index in October or November. Though it may not necessarily be actively traded, it should provide a more useful measure than the existing index, as it will help investors to gauge more closely their performance in relation to the most relevant parts of the covered bond market.

Deutsche Hypothekenbank Hannover mandated for its second benchmark covered bond of the year on Monday. The borrower is expected to price the seven year mortgage backed trade on Tuesday, taking the number of deals in that maturity year to date to almost double that of 2011.

Spain’s CaixaBank launched a novel covered bond tender offer on Friday. The borrower will buy back at par up to €2.11bn of floating rate bonds from retail clients but participating bondholders must keep the funds in a new deposit account for at least a year after the exchange.

Sweden’s Stadshypotek priced a A$750m inaugural transaction on Friday, paying only a small premium over where it would have funded in the domestic market.

Sweden’s Stadshypotek on Thursday became only the fourth issuer to launch a benchmark Kangaroo covered bond. Despite an explosion of domestic supply this year, appetite for Australian dollars remains strong, which bodes well for other Nordic issuers looking at inaugural trades.

BPCE sold the tightest French covered bond of 2012 on Tuesday, pricing a five year deal flat to its curve.

Sampo Housing Loan Bank brought its first benchmark covered bond in almost a year on Thursday, pricing that market’s sixth seven year benchmark deal this month. The borrower mandated Barclays, Credit Suisse, its parent Danske Bank, Natixis and Société Générale for a €1bn no-grow deal on Wednesday.

The Cover brought together a group of central bankers, portfolio managers and investment bankers to discuss the covered bond market in the context of the sovereign debt crisis last month. Despite a fundamental belief in the soundness of the covered bond product, the roundtable participants warned of the dangers of the inextricable link between a sovereign entity, the issuers within its jurisdiction and their covered bond programmes.

Sampo Housing Loan Bank brought its first benchmark covered bond in almost a year on Thursday, pricing a successful €1bn no-grow jumbo trade.

Sweden’s Stadshypotek on Thursday became only the fourth issuer to launch a benchmark Kangaroo covered bond. Despite an explosion of domestic supply this year the global appetite for Australian dollars remains strong, which bodes well for other Nordic issuers looking at inaugural trades.

Sampo Housing Loan Bank on Wednesday mandated for the sixth seven year covered bond benchmark of September, and should price the trade on Thursday. Despite a renewed appetite for risk in the wider market, covered bond supply remains consigned to safer names, but a successful auction for the Spanish sovereign could pave the way for further Cédulas.