UK covered bonds offer value over peers, say traders

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By Bill Thornhill
25 Feb 2020

UK covered bonds looked cheap, said traders on Tuesday, especially relative to Canadian and Australian alternatives. Their views followed a report from Moody’s which said on Monday that UK banks’ credit fundamentals were resilient and their covered bond ratings well protected.

UK covered bonds in euros offered good value in the five to seven year area, with many deals offering a substantial pick-up over Canadian and Australian covered bonds, said traders. Some UK deals offer a spread pick-up in the region of 10bp or more over those other markets, ...

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