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Funding across all parts of the capital structure is available with issuers likely to prioritise unsecured borrowing
◆ Issuer lands in 'the place to be' amid strong demand for covereds ◆ Achieves its largest covered book since at least 2023 ◆ After 7bp tightening the bond was spotted another 2bp tighter to erase new issue concession
Market participants have questioned if the differential in the risk-weightings between securitized and covered assets will affect demand for covered bonds
Data
Sub-sections
Sub-sections
Deal reviews
◆ Issuer lands in 'the place to be' amid strong demand for covereds ◆ Achieves its largest covered book since at least 2023 ◆ After 7bp tightening the bond was spotted another 2bp tighter to erase new issue concession
◆ Several market currents support new long five years ◆ UniCredit GmbH achieves larger size close to fair value ◆ CRH pushes annual covered funding to €3.15bn
◆ Deal lands flat to recent UK and Canadian trades ◆ Dollar prices find stable footing for issuers and investors ◆ Pricing in line with other currencies
◆ Largest coverage ratio for almost three months ◆ Priced flat to fair value ◆ Slow pipeline predicted for rest of week
Opinion
The fears of the covered bond market reflect a lack of conviction in the superiority of the product
The preference for a diverse group of lead managers and the convention of reciprocity keep covered bond bookrunning competitive despite concentration so far this year
Rate increases could be closer than you think
Equalising risk weightings of covered bonds and resilient STS securitizations at 5% is sound
Analysis
With masses to fund and spreads super-tight, banks will race to market, but central banks are expected to tighten
Banks could rush to issue as fast as possible, taking advantage of remarkably tight spreads
European and other regulators are working on reforms to make covered bond funding more efficient
Changes to ECB collateral eligibility requirement could lead to more blockchain-based covered bonds, Moody's suggests
More articles
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More from covered bonds
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Barclays has mandated itself for a roadshow and plans to issue its first sterling covered bond in more than two years. -
Danske Bank is restructuring its Finnish subsidiary in a move similar to Nordea’s last year and has requested investors’ consent to change terms, which will not have a rating impact, in return for a 10bp fee. The change could prevent the issuer from returning to the market soon.
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KA Finanz’s plans to convert into a wind down institution will strengthen its link to the Austrian state, but uncertainty over the regulatory and credit rating status of its covered bonds could cause its spreads to widen, said analysts this week.
