Covered Bonds

Amid competing supply from two other covered bond issuers, ING has this (Monday) morning built a book exceeding Eu1bn for its first new jumbo in a year, with guidance yet to be fixed.

The legal framework for Pfandbriefe backed by airplane loans is complete, after regulations setting out how the collateral value of airplanes is to be determined came into effect on Friday.

The covered bond market has gotten off to a busy start to the week today (Monday), with Dutch and German issuers said to be in the market and at least one French name eyeing a deal later in the week.

One of the Czech Republic’s largest mortgage lenders still sees promise in covered bonds and could launch more later this year, even if a change to tax rules meant that 2008 was a fallow year for the product.

La Caixa yesterday (Thursday) rounded off with a flourish the busiest week in the covered bond market since May 2008, pricing a Eu1.25bn five year cédulas hipotecarias flat to Santander, even though market participants had said that such pricing was aggressive. Meanwhile, a French issuer tapped the market much tighter than two weeks ago and a Dutch name is said to be preparing to go out on the road.

Pfandbriefbank schweizerischer Hypothekarinstitute set the size of its September 2016 tap at Sfr309m yesterday (Thursday) afternoon and priced it at 3bp over mid-swaps, a level made possible by the Swiss National Bank’s intervention in its domestic covered bond market.

EuroWeek cartoonist Olly Copplestone's take on this week's activity.

Despite being downgraded by Moody’s yesterday (Wednesday), Bayerische Landesbank welcomed a statement from the rating agency that it said showed the bank was “on the right track”.

BNP Paribas yesterday (Wednesday) afternoon priced the first jumbo covered bond of the year in the three year maturity, a part of the curve where government-guaranteed issuance has so far dominated the market.

The books on a five year cédulas hipotecarias for La Caixa are due to close at 1430 CET today (Thursday), with pricing fixed at flat to the level at which Santander reopened the Spanish market on Monday.

In brief: Pfandbriefbank schweizerischer Hypothekarinstitute is tapping its September 2016 2.25% bond this afternoon via Credit Suisse.

After testing the market yesterday (Wednesday) La Caixa today (Thursday) decided to open books on a new issue, making this week the busiest on the primary market in terms of volume and number of deals since May 2008.