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Bankers predict steady flow of covered bonds issuance over coming weeks despite recent spike in activity
◆ Spread tightened by 8bp from IPTs ◆ Banker said order book quality stayed high despite losing some investors ◆ Second Czech covered in two days
◆ Issuer happy with tight spread ◆ Short-dated tenor helped, according to a banker ◆ Treasurer said HCOM may issue one mortgage covered next year
Data
Sub-sections
Sub-sections
Deal reviews
◆ Rare five year tenor ◆ Competitive pricing versus dollars and euros ◆ Sixth sterling covered from Canada this year
Issuance may relent next week but the pipeline for the rest of the year is uncertain, say experts
◆ Issuer tightened spread by 7bp on Tuesday ◆ First euro covered from ANZ NZ since 2023 ◆ Acting treasurer said €750m was the target
◆ Korean lender capped trade to focus on spread ◆ Shared market with four other deals ◆ Asian firms have been busy since market reopened
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
Covered market provides 'the deepest pocket of demand' among FIG asset classes
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
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More from covered bonds
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European Central Bank board member, Benoît Coeuré, has acknowledged that extreme volatility is a worrying sign of reduced liquidity. But even so, the central bank will step up its purchasing in a move that is expected to accelerate the exodus of real money demand from covered bonds. These investors will be the slowest to return when buying eventually stops. This will hit peripheral issuers the hardest, said analysts at Crédit Agricole CIB research. -
Leads KSK Koeln, LBBW, and WGZ opened books on an €250m eight year Pfandbrief for Kreissparkasse Koeln (KSK Koeln) on Monday as Bund futures showed signs of stability. Nordic issuers are circling and could take advantage of better conditions ahead of an EU meeting on Greece at the end of this week.
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Despite the unexpectedly positive market tone on Thursday, bankers say that euro benchmark covered bonds are unlikely next week, as new issue premiums would need to be hefty. Several issuers are lining up for sub-benchmark trades however, and the sterling and dollar markets remain a possibility.
