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◆ Korean covered was one of two new issues on Monday ◆ Third Korean covered bonds in three weeks ◆ Leads chose only two deals as comparables
◆ Leads picked three Achmea bonds as comps ◆ Dutch bank’s was one of two covereds on Monday ◆ Achmea’s was fourth Dutch covered this month
Four banks brought dual tranche covered bonds in two days this week, to avoid being squeezed in congested market
Data
Sub-sections
Sub-sections
Deal reviews
◆ Leads picked three Achmea bonds as comps ◆ Dutch bank’s was one of two covereds on Monday ◆ Achmea’s was fourth Dutch covered this month
◆ Issuer chose larger order size ◆ Strong supply of five year covereds cited ◆ Seventh German covered in three weeks
◆ Banker said bonds offered no new issue concession ◆ Shinhan’s was one of six covered bonds on Monday ◆ Deal was fifth Korean covered this year
◆ Rare five year tenor ◆ Competitive pricing versus dollars and euros ◆ Sixth sterling covered from Canada this year
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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South Korea and Singapore will extend the covered bond market’s global reach this year, with deals from both countries expected in the first half. Korea, having enacted a covered bond law, seems to offer greater potential for issuance than Singapore.
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Sweden’s Stadshypotek returned to the covered bond market on Monday to price the sixth five year benchmark in euros issued in March and the 19th in that tenor issued so far in 2014. Aside from robust demand from banks in the five year area, the Swedish issuer takes advantage of a favourable currency basis swap that was identified two weeks ago by its Swedish peer, Länsförsäkringar Hypotek.
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After a four year absence, Portugal’s Banca Santander Totta mandated leads for a three year euro covered bond to be launched on Tuesday subject to market conditions. The short three year tenor was applauded by bankers, who wondered whether the issuer might be able to fund with a double digit spread pick-up over mid-swaps.