Covered bond issuers reprice secondary curves

By Bill Thornhill
16 Sep 2020

A trio of covered bonds from NN Bank, Bawag and Eika Boligkreditt that were issued on Wednesday, were all exceptionally well subscribed, though the Norwegian deal stood out as it was priced considerably through fair value. The transactions suggest secondary spreads are less representative of fair value and send a strong signal to non-Eurozone issuers with illiquid curves.

Eika Boligkreditt was set to price a €500m March 2028 at 7bp over mid-swaps, which was 2.5bp inside fair value, with unreconciled demand of €1.5bn via joint leads Crédit Agricole, LBBW, Natixis, SEB and UBS. 

The deal was announced on Tuesday and initial pricing was set at 12bp which ...

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