Covered bond spread tightening ‘impossible to justify’

tight pricing
By Bill Thornhill
16 Feb 2021

Covered bonds spreads make "no sense" against other asset classes, according to market participants, but issuers can still expect to price bonds inside fair value and be confident their deals will perform thanks to the impact of European Central Bank purchases and negative net supply.

“I’m really happy to be trading bonds from German Laender as the lack of issuance in covered bonds has been absurd,” a market maker told GlobalCapital.

He had been hopeful that issuance this year would have been greater than the paltry €14bn seen so far. “We were ...

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