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◆ Spreads tightened on both tranches ◆ Four Spanish covered bond issuers this year ◆ New issue concessions paid on both tranches, says banker
Analysts see covered bond issuance slowing to a more sedate pace from October through to the end of 2026
Volvo, Nykredit and Achmea Bank bring chunky euro FRNs, while Hong Kong dollar issuance continues apace
Data
Sub-sections
Sub-sections
Deal reviews
◆ Only sub-benchmark covered deal in the market on Tuesday ◆ Issuer paid a 'healthy new issue concession', says banker ◆ Pfandbriefzentrale planning new Swiss franc note
◆ Tuesday's only benchmark covered deal ◆ ASN's second covered in six months ◆ Short-end of the curve is an 'investor sweet spot', says bank
◆ 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
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
Analysts see covered bond issuance slowing to a more sedate pace from October through to the end of 2026
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
More articles
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More from covered bonds
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The Covered Bond Label Foundation has announced that the European Banking Authority has appointed Mr Lars Overby as its Observer Representative on the Covered Bond Label Advisory Council. The move should help improve the dialogue between industry stakeholders, regulators and the political establishment.
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The covered bond ratings of Banca Popolare di Milano and Banca Carige are likely to be downgraded to junk. This will lead to a prohibitive rise in the bonds’ capital consumption, lowering the absolute return and increasing the risk of forced selling. This will be immensely frustrating for investors, given the high quality collateral and regulatory support. The move may highlight the merits of pass-through structures.
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Providing collateral with a substantial cushion remains an important remedy to cross currency swap counterparty ineligibility, said Fitch in a note to clients on Wednesday. If collateral is not posted, the issuer becomes exposed to jump-to-default risk, and it can become impossible to replace or novate the swap in a timely manner, which would leave noteholders exposed to potential losses.