Americas

The stressed cover pool losses of Australia’s covered bonds are worse than those in core Europe, Moody’s first performance overview of the jurisdiction revealed on Tuesday. However, Australia still boasts highly rated issuers and impressive collateral scores.

The fledgling US covered bond market took a big step forward this week, after Royal Bank of Canada gained SEC registration for its $12bn covered bond programme. RBC could now bring the first SEC registered covered bond before the end of August.

The shares of Russian bank Sberbank may outperform Apple over the next 10 years if Russian reforms go ahead. But there are still clouds in the short term

Münchener Hypothekenbank’s debut dollar benchmark surprised the market and astonished the issuer, which had only envisaged a small private placement. MuHyp’s next benchmark will be a euro trade after the summer break, but though it is not originating new dollar assets the borrower has not ruled out another public deal in that currency.

Canadian banks have issued five benchmark covered bond deals so far this year with a total value of $11.75bn, reinforcing their position as the dominant issuers of US dollar covered bonds. Demand for Canadian covered bonds has remained robust and recently valuations have improved on expectations of diminishing supply. This fundamental value is a function of the strong credit worthiness of Canadian banks and the underlying mortgage collateral which is largely insured by the Canadian Mortgage and Housing Corporation (CMHC), Canada’s national housing agency. The high quality collateral, along with CMHC insurance, gives US investors a lot of comfort and an ability to view these bonds as having minimal credit risk, almost as quasi agency bonds. And with US domestic market supply of agency bonds contracting, investors have had considerable cash to put to work.

Münchener Hypothekenbank (MuHyp) will price its first benchmark dollar covered bond on Friday afternoon, launching the deal after receiving strong reverse enquiry from SSA and central bank buyers.

The uphill task facing G20 leaders was thrown into sharp relief this week as a brief market rally following the Greek election fizzled out

Despite long being lauded as one of the very few effective private sector solutions for wholesale mortgage funding, covered bonds are not quite so divorced from the state as they might seem. As the bank finance market evolves in Europe, is it possible that the implied state support seen in the most longstanding regime is, over time, replicated in other regimes?

The US will fail to tackle an exploding fiscal deficit this year, S&P president Douglas Peterson has told Emerging Markets, in a sharp reminder that the world’s biggest economy could face another downgrade within 18 months

A top IIF official slammed the implementation of new financial rules amid darkening economic data

Financiers expressed optimism in Manila that cash-rich western institutional investors would turn to Asian infrastructure investment to help balance their portfolios

Renowned economist Jeffrey Sachs warned in an interview with Emerging Markets that developing Asia must bolster social spending or risk instability