Covered bond investors brace for squeeze

By Bill Thornhill
09 Jul 2020

Investors’ search for yield in covered bonds is growing more challenging by the day, as the market looks set to become more squeezed than ever because of aggressive central bank buying, soaring redemptions and diminished supply.

An S&P report published on Wednesday identified six key factors that would shape the covered bond market over the foreseeable future. Among these, the agency said, the central bank liquidity facilities were set to dampen public bond issuance as they would encourage retained issuance instead. “This may last ...

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