Americas

Barclays took year to date dollar benchmark covered bond supply to $24bn with a hugely successful 144A/RegS $2bn five year trade. Panama’s Global Bank has also opened books on its inaugural dollar deal, though given the transaction’s unique structure it is likely to take longer than the typical covered issue.

Leading China expert Stephen Roach this week slammed US policy on China’s exchange rate, urging Washington to ‘re-focus’ its priorities or risk a protectionist backlash

The Canadian government has released details of domestic covered bond legislation that will ban issuers from using insured mortgages as collateral. Spreads of Canadian covered bonds issued under the new framework will be wider than those backed by insured mortgages, said analysts, and with just months to go until the ban comes into place, a last flurry of insured deals could hit the market.

Canadian issuers will no longer be able to use insured mortgages as collateral for covered bonds. Finance minister Jim Flaherty introduced a bill into the Canadian parliament on Thursday that will create a register for covered bond issuers. The bill will also prohibit the use of mortgages insured by private insurers or by the government backed Canadian Mortgage and Housing Corp (CMHC).

Norway’s Sparebank 1 Boligkreditt became the third European issuer to bring a five year dollar deal in the last two weeks, with all three deals offering the same spread. Also in North America, the Canadian government released its 2012 budget, though details of prospective covered bond legislation remain scarce.

Prudential Insurance in the US has priced a $1bn dual recourse structure that is secured on a pool of legacy sub-prime RMBS but also benefits from a guarantee from the insurance company. Although it has a bullet structure, the cash flows are passed through to noteholders and are sufficient to ensure timely payment of the principal and interest.

Dollar issuance continued its record breaking run on Tuesday, as UBS launched its second benchmark of 2012 in that currency. Sterling and dollars have had record first quarters, though euro supply remains subdued.

Hopes that the US covered bond bill would be passed as soon as this year were dashed last week after it emerged that the US Senate approved the Jumpstart Our Business Startups Act – but crucially without an amendment that included the covered bond bill.

An inevitable rebalancing of China’s economy will be accompanied by a collapse in commodity demand within five years, a leading China expert has warned

Brazil looks set to be the first country in the region to use the Chinese currency on a significant scale for both trade finance and official reserves

Latin America should prepare for a surge in Chinese investment, analysts urge

Toronto Dominion Bank raised $3bn of five year funding off a well subscribed book 6bp tighter than a recent trade from Canadian peer Caisse Centrale Desjardins du Quebec.