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◆ Big redemption wave and higher yields provide positive tailwind for new issuance ◆ DBS refinances in size ◆ Deka prints a touch inside fair value
Analysts expect the first euro covered bond after the summer lull to be printed in the next two weeks following seven weeks of no issuance
Analysts tip redemptions will help drive the primary market when it reopens during the next two weeks
Data
Sub-sections
Sub-sections
Deal reviews
◆ Big redemption wave and higher yields provide positive tailwind for new issuance ◆ DBS refinances in size ◆ Deka prints a touch inside fair value
◆ Strong local demand shows eagerness to buy Aussie covereds at new, tighter levels ◆ RBC prices in line with CIBC's reopener of dormant sector ◆ Onshore demand seen supporting issuance up to five years
◆ RBC to follow compatriot CIBC with five year public deal ◆ Earlier trade 'corrected' scarce supply, achieving high oversubscription ◆ Both banks appear ahead of expected local regulatory changes to covered bond treatment
◆ Second public sterling covered bond secured against BTL mortgages ◆ Spread gap compressed versus prime covered bond peers ◆ Small premium paid
Opinion
Covered bond issuers have been reluctant to issue on the same day as a central bank announcement, but this is starting to change
The new European Secured Note market is keen to secure regulatory recognition for the new product but there are advantages to not having it
If it looks like a covered bond, acts like a covered bond and prices like a covered bond, then it probably should be treated like one
Easily dismissed as "fast money" with all the negative implications that can bring in the primary bond market, hedge funds are becoming increasingly important to covered bond issuers
Analysis
Asset class is about 5bp wider than at start of the year
Comments from regulators welcomed by ECBC head
After the busiest June since 2010, banks are well progressed in the covered funding programmes
Benchmark issuance is running 13% ahead of last year
More articles
More articles
More from covered bonds
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The sovereign credit crisis spurred lawmakers to undertake a number of major initiatives designed to sever the ‘doom loop’ — the link between sovereign and bank credit risk. Recent events in Italy and Turkey show the limits of these policies, but not their impotence.
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The banking industry has largely backed efforts to use sustainable financing to cut capital charges through a ‘green supporting factor’. But regulators may use the stick, as well as the carrot, through temporary capital add-ons for dirty lending — something the financial industry is unlikely to welcome. -
Covered bond primary activity is expected to pick up from as early as next week with a couple of German issuers understood to be monitoring the market. FIG activity is predicted to ratchet up again the following week as borrowers move in advance of potentially negative rating news.
