Covered Bonds
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Senior spreads are tight and covered bonds risk widening further -
Dutch banks are changing the composition of their green pools
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More time needed, but Pfandbriefe cover pools should be safe
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Sticky wage growth and higher net supply may then hit sentiment
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One or two deals may happen next week, but it is unlikely
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Investors check credit line capacity ahead of deal
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Banks may bring forward their 2024 funding plans to snap up duration as investors look to position ahead of predicted rate cuts
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Inverted five and 10 year swap curve means long dated covered bond issuance less attractive than senior format
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A German bank is said to have cancelled issuance plans
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Recent Moody’s sovereign upgrade bolsters BPER deal while Wuestenrot not fully covered
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National champions fare better in dragging in demand while lower tier banks struggle
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Covered bonds in Portugal and Italy to benefit too
