Covered bond redemptions boost supply hopes

Clock_euros_Adobe_575x375_060220
By Bill Thornhill
01 Jun 2020

Strong market conditions and tight spreads should encourage a few covered bond issuers to consider returning to the market in June, and though balance sheet optimisation is likely to remain the biggest driver of primary market activity, a surge in covered bond redemptions will play a critical role.

Covered bond spreads have tightened considerably from their worst levels and, with KBC attracting demand of €3.4bn for its €1bn December 2025 which was issued last week at 6bp over mid-swaps, it seems that investors are receptive to further supply. 

This is especially the case in the long end, ...

Already a subscriber?

Continue reading this article

Try full access to GlobalCapital

Free trial

Want to learn more? View subscription options