Covered Bonds
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Special attention to size, tenor, labelling and timing ensured a solid outcome -
The issuer could have followed Coventry into euros after its LCR breakthrough
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Incentives to buy longer deals from ING and Sparebank Vest were less obvious
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Volatility is high, the mood is nervous and the long end looks shaky
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The deal went well, even though it is ineligible for liquidity portfolios
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Coventry Building Society’s deal attracted the most demand despite concerns over LCR status
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NordLB scored its largest order book on Monday as investors flocked to covered bonds
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The issuer did not need the funding but was keen to establish a strategic presence
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Aareal and Macquarie hauled in less demand for shorter deals
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Better repo terms would trigger race for high quality collateral
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RBC, ING Diba, BSH and Danske pre-fund in size in case market conditions deteriorate
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More issuance is on the horizon as Bausparkasse Schwäbisch Hall and ING-DiBa mandate deals and non-eurozone banks eye funding too
