Austria

Demand for senior trades from Commerzbank and Raiffeisen Bank International this week reflected a softness in secondary performance, as well as a slowdown in the primary market as European banks enter blackout season.

Danske Mortgage Bank, Santander UK, Raiffeisenlandesbank Hypothekenpfandbrief and UniCredit Bank AG were marketing covered bonds on Wednesday, steering well clear of negative yields by tapping into healthy demand for long dated assets.

Issuers rushed to open the euro covered bond market this week. Trades from ABN Amro, Erste Group and LBBW showed that investors are ready to put cash to work, but higher new issue premiums suggested that issuers were taking a 'conservative' approach at the beginning of the year.

Christian Schreckeis, the former head of capital markets and investor relations at the Austrian treasury, has taken on additional responsibility for Austria's budget.

Cerberus Capital Management has sold the last of its stake in Austrian bank Bawag, its second trade in two months following an earlier sale in November.

Raiffeisen Bank International (RBI) managed to attract a convincing order book for its debut covered bond issued on Monday following a roadshow, largely thanks to the rare double-digit spread it paid over mid-swaps, and the compelling pickup compared to its Austrian peers.

Austria has the green light from Chinese regulators for its inaugural Panda bond issue as it looks to become the second eurozone sovereign to tap the market.

Danish Ships Finance, Natixis Pfandbriefbank and Raiffeisen Bank International will keep the primary market busy with deals and roadshows this week. But the main focus will be on the size and spread that Deutsche Bank achieves for its innovative debut structured conditional pass through (CPT) covered bond that will be launched imminently.

Two SSA borrowers are coming to the market for euro deals on Tuesday. The European Financial Stability Facility and Erste Abwicklungsanstalt will both print what are likely to be their final benchmarks of the year.

Shares in Danish renewable energy firm Ørsted and in Salini Impregilo, the Italian construction company, continued to trade well this week, generating strong returns for block investors.

The covered bond market was on strong form at the beginning of the week, with Austria’s Volksbank Wien extending its covered bond curve with its second ever trade, which it priced flat to fair value.

In an illustration of the spread tightening under way in covered bonds, Deutsche Apotheker-und Aerztebank (Dapo) priced a 10 year inside its curve this week. At the same time Raiffeisenlandesbank Vorarlberg followed DZ Bank into the 15 year tenor to give a tempting reoffer yield of almost 50bp.