Covered bond squeeze transforms to strangle

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By Bill Thornhill
11 Jan 2021

The unprecedented shortage of primary covered bond supply, mounting redemptions and depleted trading inventories have created an acute squeeze on pricing. A much bigger wave of investors will soon be forced to exit the market if new bonds don't materialise.

By this time last year 15 covered bond benchmarks had been launched, including 10 euro deals worth more than €10bn, and five sterling trades worth more than £3bn.

But, even though there are €30bn of covered bond redemptions due this month, only two euro deals with ...

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