Traders reluctant to 'chase’ covered bond spreads tighter

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By Bill Thornhill
18 Jan 2021

Even though technical factors are highly supportive for covered bonds, traders say they are unwilling to lift offers, reflecting increased anxiety about limited performance potential and an underlying concern that credit market sentiment is less sure-footed that at the start of this year.

€30bn of covered bond redemptions and coupon payments will be returned to investors in January, of which €10bn is due this week. But so far this year little more than €9bn has been issued in euros and dollars and only €1.5bn worth of deals has been mandated.


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