Covered Bonds
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The covered bond market had one of its busiest ever sessions this (Monday) morning, with four institutions making the most of an issuance window despite overall sentiment remaining fragile.
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Bank of New Zealand is close to launching a debut covered bond off a NZ$3bn (Eu1.67bn) programme, which will be the first covered bond from New Zealand.
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The primary covered bond market is expected to be very busy next week, with mandates for Münchener Hypothekenbank and OP Mortgage Bank announced this (Friday) morning said to be only the first of many due to emerge in the coming days. Meanwhile, France’s CM-CIC snuck out a deal today between a German public holiday yesterday and US non-farm payrolls today.
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The European Central Bank reported Eu1.003bn of covered bond purchases under its programme this week as the scheme entered its final month. -
The biggest foreign Swiss franc covered bond in well over four years emerged on Tuesday when Canadian Imperial Bank of Commerce issued a Sfr500m seven year. The deal, which grew from an original minimum of Sfr300m to rank as the largest from a non-Swiss name since March 2006, was priced at 10bp over mid swaps.
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BNP Paribas priced the biggest benchmark covered bond since the middle of April yesterday (Wednesday) to wrap up the busiest day in the market since then, with Sparebanken Vest and Dexia Kommunalbank Deutschland also taking half a yard each out of the market.
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Caja Madrid yesterday (Wednesday) became only the second issuer to have its covered bonds upgraded by Standard & Poor’s upon implementation of the rating agency’s new methodology. This means that all cédulas, either single or multi-issuer, rated by S&P are now AAA.
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Standard & Poor’s has affirmed at AAA the public sector-backed covered bonds issued by Dexia LdG Banque and Eurohypo Luxembourg, but assigned a negative outlook to the latter’s because their rating would automatically be cut in the event of an issuer downgrade.
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Australian bankers and lobbyists are taking a closer look at covered bonds following moves by New Zealand’s central bank to develop the product. But scepticism from small lenders and a pending election present extra hurdles for bankers hoping that covered bonds will be introduced in the country.
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Bankers and lobbyists are pushing Australian regulators to take a closer look at covered bonds in a move that could boost international interest in the country’s debt markets.
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Crédit Mutuel Arkéa yesterday (Tuesday) achieved a targeted size of Eu1bn for its inaugural public covered bond despite facing deteriorating market conditions during the deal’s execution.
