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Meanwhile, BNP Paribas hires in structured finance
Shrinking spreads between the two asset classes have left investors asking if the risk of senior debt is worth it
◆ Thursday's only covered deal, possibly February's last ◆ French issuer likes dual tranche format ◆ 'Disconnect' between primary and secondary markets apparent, says banker
Data
Sub-sections
Sub-sections
Deal reviews
◆ Norwegian bank increases size ◆ Issuer meets spread objective ◆ Banker said he drew confidence from secondaries
◆ Italian bank landed price and size with latest offering ◆ Deal was second Italian covered bond of 2026 ◆ Banker said trade had ‘good momentum from beginning’
◆ New Zealand bank tightened spread close to FV ◆ Bond more than three times subscribed ◆ Banker said spread struck a fair balance
◆ Icelandic bank 'happy' with balance between spread and order book ◆ Treasurer noted importance of Aa1 rating ◆ New bond refinances 2021 issue
Opinion
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
Equalising risk weightings of covered bonds and resilient STS securitizations at 5% is sound
Bank's head of DCM and syndicate chief talk bond market expansion plans
Analysis
Specialist investors and strong names dominate as issuers stretch out to 15 years
Unsecured bonds could become more expensive to issue, covered bonds cheaper
The euro covered bond market shook off a volatile end to 2024 to rebound with a raft of exceptionally popular deals in 2025. Investors appeared eager to pile into euro covered bond books this year, propelling bid-to-cover ratios upwards and new issue premium downwards, writes Frank Jackman
Covered bond funders will have to weave their way through tight senior unsecured and wide SSA spreads in 2026 if they are to refinance the wave of redemptions that awaits them. One big question for the year ahead, discovers Frank Jackman, is whether issuers will be tempted to pay up for duration
More articles
More articles
More from covered bonds
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A widening in the basis swap between three and six month Euribor and a recent rise in yields have improved the attractiveness of covered bonds for a proportion of investors. But for many others, bonds that trade well through swaps in the secondary market are only fit for the European Central Bank. -
Investors wasted little time placing orders for NIBC Bank’s €500m 10 year conditional pass-through covered bond that was issued on Wednesday, reflecting that it offered the highest spread of any covered bond issued this year by any bank in core Europe. This is also likely to be a very rarely issued structure.
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Although UK covered bonds are trading at their tightest levels for the last year, they still offer a decent pick-up versus some international peers. With the UK’s vaccine rollout and growth expectations showing promise, spreads may well tighten. But there is a lack of fresh supply. Some is needed to improve price discovery and catalyse performance.
