Covered Bonds

La Caixa this (Thursday) morning launched the fourth cédulas in a week, a three year issue that bankers away from the leads said was ambitiously priced, after Banco Sabadell yesterday became the first Spanish issuer to reach a Eu1bn deal size since July. The Spanish covered bond was the only new benchmark in the market this morning, after issuers including CM-CIC and Royal Bank of Scotland wrapped up new issues yesterday.

Denmark’s Nykredit will tomorrow (Friday) begin a September round of auctions to refinance adjustable rate covered bonds maturing in October, and although volumes are higher than in previous years the supply is expected to be well absorbed.

Banco Popular Español extended a reopening of the cédulas market yesterday (Tuesday) by becoming the first Spanish bank away from BBVA and the Santander group to launch a new deal after the summer break. The issuer told The Cover that its success reflected growing interest from international investors.

The benchmark covered bond market today (Wednesday) experienced its busiest day since its post-holiday reopening, with four issuers from different jurisdictions launching deals to promptly kick-start what is traditionally a month of heavy supply. But although the high level of supply was absorbed, some market participants sounded a note of caution.

UniCredit launched its first benchmark obbligazioni bancarie garantite issue of the year this (Tuesday) morning to extend the market’s post-holiday reopening to Italy, while Spain’s Banco Popular Español is offering a record spread for a Eu500m minimum three year cédulas issue.

Banesto sized a five year cédulas hipotecarias at Eu600m yesterday (Thursday), taking Eu500m-plus covered bond issuance over the past five working days to Eu6.9bn. The Spanish issuer told The Cover that it was happy to have been able to issue successfully given how tricky the market has been.

Philippe Tapernoux has left Natixis to become head of financial institutions debt advisory at KPMG.

Banesto showed the breadth of the covered bond market’s post-holiday reopening today (Thursday) with a Eu500m minimum five year cédulas hipotecarias. Meanwhile, Berlin Hyp priced a Eu500m issue in the face of low yields and spreads, while Bawag PSK finally emerged after announcing plans for a new issue back in May.

ING Bank and Terra BoligKreditt reopened the covered bond market for jumbo and sub-jumbo issuance, respectively, and The Cover spoke to the institutions about the timing and execution of their new issues.