Lloyds mass tender offers to hit UK covered bond liquidity

Lloyds Bank decided to tender some of its covered bonds in three major currencies this week in what it called a “prudent approach” towards its liquidity base. The move could prompt more issuance in the asset class this year in an effort to refinance some of the tendered securities, but it could also decrease liquidity at the short end of the curve, given the cheaper refinancing alternatives open to banks.