Senior rally puts dollar covered bonds 'in the shade'

Euro Dollar
By Bill Thornhill
13 Aug 2020

An improvement in the cross-currency basis swap has made dollar funding look more attractive to covered bond issuers, but this is not expected to lead to higher supply with bank senior unsecured dollar paper looking the more compelling option.

The five year cross-currency basis swap between euros and dollars has improved from minus 20bp to minus 17bp over the last three weeks, making it more favourable to issue in dollars for issuers funding in euros.

However, the storming performance of senior unsecured bank bonds in ...

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