Covered Bonds

The US dollar covered bond market is all set for Royal Bank of Canada to issue the first SEC registered deal. But despite the promise this offers, others may not yet be ready to follow.

Deutsche Hypothekenbank became the second recent German issuer to answer domestic accounts clamouring for paper with a tightly priced tap on Wednesday. But with buyers making enquires on all core names across the curve, opportunistic extensions are an option for a wider range of names.

The stressed cover pool losses of Australia’s covered bonds are worse than those in core Europe, Moody’s first performance overview of the jurisdiction revealed on Tuesday. However, Australia still boasts highly rated issuers and impressive collateral scores.

The fledgling US covered bond market took a big step forward this week, after Royal Bank of Canada gained SEC registration for its $12bn covered bond programme. RBC could now bring the first SEC registered covered bond before the end of August.

Royal Bank of Canada has moved closer to bringing the first fully SEC registered covered bond. The deal is likely to happen in late August or early September after RBC’s $12bn covered programme became SEC registered on Monday.

RBC is poised to issue the first fully SEC registered covered bond.

Given the bid for core assets, covered bond bankers still hope for further taps during the summer holiday season, while in the secondary market, activity is focused on core jurisdictions which are largely bid only. In the periphery markets there are growing concerns that the recent rally may be close to fading.

The Financial Services Authority is set to increase scrutiny on asset pools, raising the cost of doing deals, bankers have told The Cover.

The following document is a copy of all the shortlisted lead managers, issuers and deals that you will find in the poll.

European covered bond issuers, along with senior unsecured financials and investment grade corporates, were this week presented with excellent funding conditions, despite a ratcheting-up of pressure on Spain and Italy in the early part of the week.

Investors clamoured for allocations of a rare late-July covered bond issue from ABN Amro this week, placing €4bn of orders for the first Dutch deal since January.

Fitch has downgraded four Italian covered bond programmes to between double-A and triple-B. This latest round of cuts was driven solely by new over-collateralisation requirements, but Fitch is bringing in a new methodology and could look at Obbligazioni Bancarie Garantite (OBGs) again soon.