Austria

Raiffeisenlandesbank Vorarlberg issued its inaugural covered bond on Monday which, despite offering a modest concession, was the most oversubscribed benchmark Austrian transaction since May.

Rating: Aa1/AA+

Österreichische Kontrollbank mandated banks for a three year dollar benchmark global on Tuesday, with strong investor demand for the currency as a result of a lack of supply.

Hyp Noe’s tightly priced €500m Aa1 rated seven year covered bond issued on Tuesday was thinly oversubscribed, in contrast to a similar sized triple-A rated six year from BayernLB which found greater demand despite being priced tighter and with a smaller concession.

Raiffeisenlandesbank Niederösterreich-Wien (RLB NÖ-Wien) was able to whittle down the new issue concession for its 8 year covered bond on Wednesday, but demand was weaker than for Tuesday’s two trades.

Raiffeisenlandesbank Niederoesterreich-Wien (RLB NÖ-Wien) announced a mandate for a new trade on Tuesday, hoping that the rare product type and a fixed deal size will attract investors.

Austria’s Ministry of Finance will finally set out draft proposals to harmonise the country’s three covered bond legal frameworks early in 2019 after years of deliberations. And, with the introduction of new measures that bring the unified law into line with best practice, rating upgrades are likely.

The Republic of Austria has reduced its benchmark government bond funding target for 2018 by 15%, mainly due to a further downpayment from the sale of bad bank assets.

Vienna Insurance Group is redeeming a legacy tier one note next month, but does not intend to replace it with a restricted tier one (RT1) bond. Once one Austrian or German insurer issues, others will follow, according to CreditSights.

Bayerische Landesbank (BayernLB) attracted more demand for its €500m nine year than Hypo Vorarlberg Bank (Vorhyp) did for its €500m eight year this week, even though the Austrian deal benefits from greater scarcity value.

Austrian machinery maker Andritz has launched a €300m four tranche Schuldschein, with tranches of seven years and 7.75 years. A banker said the intention was to see if lenders could be lured further out along the maturity curve.

Hypo Vorarlberg (Vorhyp) and Bayerische Landesbank (BayernLB) have mandated leads respectively for eight and nine year €500m no-grow covered bonds.