Covered Bonds
-
Inverted five and 10 year swap curve means long dated covered bond issuance less attractive than senior format -
A German bank is said to have cancelled issuance plans
-
Recent Moody’s sovereign upgrade bolsters BPER deal while Wuestenrot not fully covered
-
National champions fare better in dragging in demand while lower tier banks struggle
-
Covered bonds in Portugal and Italy to benefit too
-
Spread for €1bn five-year tightens 4bp while new issue concession lands at 6bp
-
Sub-benchmark covered bond cannot be tightened as attractive window closes
-
Investors confident after US CPI print lap up deals at 4bp-5bp NIPs
-
Dealers away say rich pricing versus Pfandbrief led to disappointing orders
-
Bankers away from the deal put the NIP at 1bp to 2bp
-
Cost of long dated deals too much for borrowers despite clamour
-
But rates uncertainty to keep borrowers away from the long end
