Covered Bonds
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Lower than expected issuance volume to keep covered spreads tight into the autumn -
◆ Deal to build on strong bid for non-European paper ◆ Investor call scheduled for next week ◆ 50bp area start possible, say bankers away from deal
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◆ Deal lands at record spread through OATs ◆ Immediate performance pushes OAT spread tighter ◆ Investors still keen despite tight price
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◆ Deal one of the tightest of the year ◆ Granular book peaks at over €2.2bn ◆ Slim to no premium paid
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◆ Popular trade performs in secondary ◆ Performance erases premium ◆ NAB offers an attractive relative value proposition
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◆ Deal appears tight compared to recent supply ◆ 'Decent' pick up paid over SSAs ◆ Slim premium offered over Nordic peers
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◆ 'Humongous' compression at the long end attractive ◆ Small premium paid on tighter headline level ◆ Tasty pick up still offered over KfW
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◆ Belgium arm takes size with first deal since February 2024 ◆ Slim premium paid ◆ More Benelux supply expected
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Core Europe to lead the charge but without German issuers
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Belly of the curve likely to be most active, but anything from three to 10 years is doable
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HQLA investors have reallocated away from covered and into SSAs
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DekaBank's sub-benchmark success shows investors are there, but issuers are unwilling to follow
