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◆ British lender fixed spread and deal size from outset ◆ Order book closed at over two times the deal size ◆ Fixing terms enabled faster execution, the lender said
◆ Largest Czech bank tightened spread by 8bp ◆ Subsidiary of Erste Group announced mandate on Monday ◆ 'Arithmetically, there is no FV', a banker said
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
Data
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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
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
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
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
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UBS brought additional tier one debt back to capital markets for the first time since the UK's EU membership referendum on June 23 this week, as European banks returned en masse to the FIG market.
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Four years after Spain approved a new legal framework to support funding of export finance loans, BBVA has set up the first covered bond programme to be backed by the loans, which Moody’s rated on Wednesday. And with Spain set to update its Cédulas Hipotecarias law, others may be obliged to follow.
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BayernLB successfully issued a $300m Pfandbrief at a tighter spread than it could have achieved in euros. It follows a privately placed sterling Obbligazioni Bancarie Garantite (OBG) issued by Banca Popolare dell'Emilia Romagna (BPER).