Sonia covereds hold in as ‘perfect storm’ nears

Storm road 230-150x
By Bill Thornhill
13 Aug 2019

UK Sonia-linked covered bonds were trading stably on Tuesday, in contrast to euro denominated UK covered bonds which have been marked wider amid rising expectations the UK will crash out of the European Union. But, with macro-economic risks abounding, the global picture is disturbing bankers.

Although spreads were a touch wider on Tuesday, bankers reported relatively stable two way flows in Sonia-linked UK covered bonds. 

The Sonia-linked market is still attracting interest. Accounts that were unable to buy deals at launch have been notably increasing demand, said a covered bond trader. 

“There’s some buying going ...

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