Covered bonds to improve as real money exits

By Bill Thornhill
02 Oct 2019

Covered bond market conditions are now improving as the new quarter ushers in a fresh wave of investor cash. With supply expected to fall and the European Central Bank (ECB) likely to step up purchases, spreads should tighten. But investors believe that as real money buyers are inclined to protect their profits, they will gradually retreat from this market.

Although much of the covered bond market is negative yielding, investors are braced for more spread tightening and deals issued so far this week by Banca Monte Dei Paschi di Siena (MPS), Caisse de Refinancement de l’Habitat (CRH) and SR Boligkreditt have backed that view up.  

MPS ...

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