Covered bonds going cheap but investors don’t care

By Bill Thornhill
11 Feb 2021

The covered bond market is historically cheap relative to senior unsecured paper, but real money buyers have been unimpressed as other valuation comparisons have proved more important.

The spread differential between the iBoxx banks senior index and the iBoxx covered bond index stands at 48bp, a quarter of the level it was at 11 months ago. 

Issuers have been keen to take advantage of the tight pricing in senior and have generally steered away from covered ...

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