Covered bond trio pounce on higher yields

Three darts in bullseye 230x150
By Bill Thornhill
17 Oct 2019

Three covered bond issuers took advantage of a rise in yields, following what seemed a breakthrough in Brexit negotiations, to issue transactions that would not have been well received two weeks ago. Banca Popolare dell’Alto Adige’s debut and Sparkasse Hannover’s sub-benchmark deals delivered positive returns, while demand for a slightly negative-yielding benchmark from Sparebanken Sør Boligkreditt was boosted by its green credentials.

Bund futures reached a new low since their early September highs on Thursday, dragging yields higher across the board. 

Ten year euro swaps were at 0.05% compared to minus 0.17% on October 8. Seven year swaps yielded minus 0.12% compared to minus 0.3% little more than a week ago. ...

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