Scarce supply helps covered bond issuers price deals flat to fair value

tight pricing
By Bill Thornhill
13 Jan 2020

A lack of supply relative to 2019 and much more aggressive central bank buying ensured that Banco Sabadell, Royal Bank of Canada, Deutsche Bank and RLB Oberösterreich were able to price their respective covered bonds flat to fair value on Monday.

Banco Sabadell racked up demand of more than €3bn for its €1bn Cédulas, due February 2028 — its first covered bond since April 2017. This was the largest covered bond order book seen so far this year.

The deal, which is rated Aa1/AAA with Moody’s and DBRS, ...

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