Spread sensitivity signals that covered bond rally may have run its course

By David Freitas
19 Jun 2020

Investors appeared to be more sensitive of price movements in new issues of covered bonds this week, with valuations in the asset class having returned to within touching distance of their January levels.

Market participants said that euro covered bond spreads appeared to stabilise this week, after several months of grinding tighter.

This has led to more price sensitivity during the bookbuilding process for new issues in recent trading sessions.

A €1bn 10 year deal from Caffil on Thursday, for example, lost ...

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