UK issuers make strategic return to dollar covered bonds

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By Bill Thornhill
06 Feb 2020

144A dollar covered bonds issued this week by Santander UK and Nationwide Building Society signal that UK banks have made a strategic return to the asset class after an absence of about 10 years. Their return, which is driven by the need to refinance liquidity borrowed under the Bank of England's Term Funding Scheme, should improve price discovery for dollar denominated securitizations.

On Tuesday this week Santander UK issued its first dollar covered bond, a $1.25bn three year 144A dollar covered bond at 28bp over mid-swaps with demand of $1.7bn and in from an initial spread of 30bp. Bookrunners are Credit Suisse, HSBC, RBC Capital Markets, Santander ...

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