Issuance to improve but covered bonds to stay squeezed

By Bill Thornhill
17 Nov 2020

Covered bonds are expected to remain a core funding tool next year and the outlook for supply is likely to improve. However, net of redemptions and central bank purchases, the market will remain highly squeezed.

Euro covered bond issuance of €110bn is expected in 2021 compared to €90bn so far this year, according to Commerzbank. Although this represents a considerable improvement, it is well below the €137bn issued in 2019.

Moreover, with redemptions of €132bn due next year, net supply still ...

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