Covered Bonds

When an investment bank splashes out on a big money rockstar hire, it’s not just a transaction or a rejig of the org chart; it’s a public statement of intent as well as a high profile bet that comes with a lot of buzz, bravado, and backbiting

Leads to use comparables ranging from South Korea to Denmark when pricing upcoming deal

German issuer's own comparable tenor deals disregarded in favour of more recent peer supply

Investors keen on duration as Thermo Fisher and Pfandbriefzentrale also go longer

Estonian lender set to join Austrian and German-led sub-benchmark flurry

The trade drew good demand after a slow week for covered bond issuers

The specialist lender's rare appearance in the market will be for £500m

Investors are becoming more price sensitive, said one banker

◆ Deal is third Aussie trade in a week ◆ Aussie lender takes size ◆ Slim orderbook necessitates slim premium

◆ 10 year note raises €750m alongside €500m five year ◆ Longer note lands double digits through govvies ◆ Slim to no premiums paid for both bonds

Duration returns to euro covered bonds but supply wave looks unlikely with relative value a sticking point

◆ Issuer prints €2.25bn across two tranches ◆ 10 year tranche solidifies returning long end demand ◆ Slim premium needed on both tranches