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◆ Strong market conditions for the asset class ◆ New issue premium debated with pricing in reach of fair value ◆ Largest BNZ covered bond since at least 2023
◆ 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
Data
Sub-sections
Sub-sections
Deal reviews
◆ Strong market conditions for the asset class ◆ New issue premium debated with pricing in reach of fair value ◆ Largest BNZ covered bond since at least 2023
◆ 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
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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National Bank of Canada went to the euro market on Tuesday for funding levels that it would not have been able to match in dollars, joining a string of other North American issuers looking to benefit from cheap financing conditions in the currency. -
Covered bonds from Italian banks underperformed those from lenders in Spain and Greece last week, although this may have partly been down to recent new issues offering significant concessions to investors.
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After a strong start to the year, covered bond supply is widely expected to beat expecations. Prospects for the second half of the year will depend on how credit markets behave and how issuers consider refinancing central bank term liquidity. Given these large variables, supply this year could yet prove exceptionally high.
