Covered Bonds

GlobalCapital asked the heads of debt capital markets at over 50 of the top bond houses where they saw threats and opportunities for 2024. Geopolitics are once again at the top of the worry list but so is retaining junior staff. Overall, however, Toby Fildes and Ralph Sinclair, discovered an optimistic tone, no doubt helped by the pervasive belief that interest rates are at or near their peak

The main consideration for eurozone banks at the start of 2023 was to garner what remained of the ECB bid for covered bonds but by the end of the year they had negotiated not one but two crises. Sarah Ainsworth reports on how, despite all the volatility, they navigated another strong year for issuance

Rate peak joy soothes angst over Austrian collapse, but losses will surface

Despite prevailing bleak sentiment from expensive Pfandbrief issuers, the market is bracing for the reopening of the long end of the market

◆ Interest rate expectations power demand for higher yielding bonds, duration in covereds ◆ Synthetic indices tighten to fresh 12-month low ◆ Market in rude health for January issuance

Spreads have been resilient as S&P says limited impact on covered bond programmes from Austrian property company's default

◆ ECB repayments to influence banks’ covered and SP issuance ◆ But TLTRO repayments less important than this year ◆ Large pre-funding could mean lighter January supply

Bank analysts agree that Bund ASWs will tighten in 2024

Regular Swiss issuer reopens two covered bonds in last sale of 2023

◆ End of year slow down exacerbated by caution ahead of major central bank decisions ◆ Sentiment stays strong albeit some dents after strong US economic data forces changes in rate cut expectations ◆ European banks send RFPs for January issuance

EU Parliament and Council have reached a provisional agreement on EPBD but 'devil is in the details'

Regular issuer targets lower size and lands inside last trade from Pfandbriefbank