Covered Bonds

Crédit Agricole Home Loan SFH revived covered bond supply as well as Swiss franc activity from France when it issued a Sfr200m covered bond this week.

Euro denominated covered bond issuance fell to a decade low in the first half of 2012, and though issuance in other currencies has helped take up the slack, the overall volume is still a long way down on last year.

Münchener Hypothekenbank (MuHyp) launched its first benchmark dollar covered bond on Thursday. The borrower opened books on a $500m no-grow three year deal little over a month after it sold an exceptionally successful 10 year euro Pfandbrief.

Australia’s Westpac Banking Corp returned to the euro market to launch the jurisdiction’s first seven year covered bond on Monday. Though the issuer closed the spread gap with its Nordic peers, a trio of competing senior unsecured deals contributed to a slow bookbuild, said syndicate bankers, with some also suggesting guidance had been set too tight.

Bayerische Landesbank launched its first euro benchmark covered bond in over a year on Wednesday, bringing a 10 year public sector backed Pfandbrief originally mandated in 2011.

Bayerische Landesbank (Bayern LB) found strong international demand for its latest 10 year benchmark, which was priced flat to the borrower’s outstanding curve. The €500m trade completed Bayern LB’s 2012 covered bond funding plan, though the issuer’s determination to bring a long dated deal and push for tight pricing limited demand, said syndicate bankers.

Euro denominated covered bond issuance fell to a decade low in the first half of 2012, and though issuance in other currencies has helped take up the slack, the overall volume is still a long way down on last year. However, rating downgrades will oblige banks to post more collateral against swap arrangements and this will drive funding needs materially higher.

After 28 years in banking Philipp Waldstein Wartenberg, head of group strategic funding and portfolio at UniCredit in Milan, is moving to the investor side, joining MEAG from the start of next year.

Bayerische Landesbank (Bayern LB) launched its first euro benchmark covered bond in over a year on Wednesday, bringing a 10 year public sector backed Pfandbrief originally mandated in July 2011. The trade prioritised pricing over size and received less interest than recent German deals. At the less traditional end of the covered spectrum, Nykredit Realkredit opened books on a tap of a recently issued junior covered bond.

Crédit Agricole CIB’s Bruce Cairnduff is relocating to Hong Kong as head of debt capital markets for Asia, including Japan, in a move that underscores the firm’s desire to strengthen its presence in Asia.

The senior market took centre stage again on Tuesday, dissuading covered issuers from competing with another trio of unsecured trades after Westpac’s slow bookbuild on Monday. The Australian issuer closed the spread gap with its Nordic peers, but found demand lacklustre compared with earlier Australian benchmarks.

For the 2012 awards The Cover has changed the voting process. Lead managers and issuers will need to submit pitches for the awards they wish to be shortlisted for. Please submit pitches of no more than 250 words before 5pm, Thursday July 19.