CBPP3 is central to covered pricing and not LCR treatment

By Bill Thornhill
23 Oct 2014

The primary covered bond market picked up after a week without any issuance, just as the European Central Bank’s third covered bond purchase programme (CBPP3) got underway. All four deals issued this week were ineligible for the programme which, from a pricing perspective, made more a difference than their preferential treatment under newly established liquidity rules.

Commonwealth Bank of Australia (CBA) mandated joint leads HSBC, RBS and UBS, along with its own syndicate desk, for the first euro-denominated seven-year benchmark to price in single digits over mid-swaps. Two hours after the mandate was announced on Tuesday, initial indications of interest stood at around €1bn ...

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