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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
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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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Länsförsäkringar Hypotek priced a €500m no-grow seven year covered bond with a roughly 2bp new issue premium on Thursday. This was the second covered bond not eligible for the European Central Bank’s purchase programme (CBPP3) issued this week following a deal from Abbey. The spread pick-up relative to CBPP3 eligible deals attracted a decent book and the maturity played to asset managers and central banks alike.
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The World Bank Group has appointed Loïc Chiquier, chief technical officer and senior advisor of the finance and markets global practice, as its observer representative on the Covered Bond Label Advisory Council.
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Fitch published a peer review of five Portuguese covered bond programmes on Wednesday, rating them all in the BBB basket. Though the quality of the cover pools is high, as reflected by one of the lowest portfolio loss rates in Europe, the risk of a disruption to the flow of payments is also high.