Covered bond technicals to win the day

By Bill Thornhill
12 Feb 2020

Some recent covered bond issues would have barely have made it over the line without the European Central Bank’s help. Meanwhile, valuations are elevated. But the market still looks attractive compared with unsecured credit, a leading investor told GlobalCapital on Wednesday.

Stripping out the ECB’s order and the amount sold to joint lead managers, deals issued this week by Berlin Hyp and Deutsche Hypo would struggle to have been priced where they were. 

“But on other hand, the ECB can buy up to 70% of each deal,” the investor said. ...

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