Commerzbank

Covered bonds issued this week by Axa Bank and Lansforsakringar Hypotek (LF Hyp) were priced at — or inside — fair value, partly reflecting a technical squeeze that was aggravated by the European Central Bank’s move to step up purchases in the secondary market.

Deutsche EuroShop, the German property company, completed an 8.7% capital increase as an accelerated sale on Tuesday evening, raising €165m to finance the acquisition of the Olympia Center, one of the largest shopping malls in the Czech Republic.

Lansforsakringar Hypotek (LF Hyp) has issued its longest dated covered bond which, with a positive spread to mid-swaps, gives a slight premium to other Swedish banks but no concession to its own curve.

Novomatic, the Austria-headquartered gambling company, has syndicated a €1bn five year revolving credit facility as it looks to combine its credit facilities into a single line.

Deutsche Bank confirmed over the weekend that it was preparing an €8bn rights issue, alongside a fresh strategic overhaul that includes a partial IPO of its asset management division and the reintegration of Postbank.

Lenders that have chipped in for Bank Negara Indonesia’s $750m facility can expect to be scaled back by close to 50% of their original commitments, said bankers close to the trade. Allocations are due to be announced in the next few days.

DG Hyp enjoyed solid demand for a long nine year Pfandbrief deal this week as, despite the measly new issue concession, it offered an unusually high pick-up against Bunds.

After a month of much slower supply, increasingly desperate covered bond investors clamoured to buy a long nine year Hypothekenpfandbrief issued on Wednesday by DG Hyp. Though the bonds offered little new issue concession, interest was also boosted by the deal’s hefty spread over Bunds.

Covered bond supply is likely to recover over the next week or two, particularly in core Europe where spreads to Bunds have become more attractive, which bodes well for DH Hyp’s forthcoming Pfandbrief. But for non-eurozone issuers, senior funding is likely to prove more attractive.

Since the global crisis, plenty has been written about banks paring back their lending activities and more stringent capital adequacy rules limiting funding opportunities, particularly for higher-risk borrowers such as smaller companies.

Kion Group, the German forklift manufacturer, has finished a Schuldschein deal that raised almost €1bn, in one of eight Schuldschein trades that were launched or priced this week from a wide range of sectors and regions.

Landesbank Baden-Württemberg and WL Bank successively priced the tightest covered bonds of the year this week and both were able to tighten pricing to a greater extent than any previous German issuer.