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Covered issuance 'more or less done for now,' analysts say
Covered bonds performed despite geopolitical shocks in early 2026 and will continue to do so for the rest of the year, Rabobank has suggested
New issue premiums have remained around 2bp despite five deals in the past two weeks compared with 12 in the previous two weeks
Data
Sub-sections
Sub-sections
Deal reviews
◆ Second public sterling covered bond secured against BTL mortgages ◆ Spread gap compressed versus prime covered bond peers ◆ Small premium paid
British bank picks four leads to run its second public sterling BTL mortgage covered bond
◆ Canadian issuer tightened spread by 2bp ◆ Bank's seventh tranche of covereds of 2026 ◆ BMO has placed dollar euro and sterling covereds since January
◆ First covered bond of 12 years or longer since the bank issued in January ◆ Banker ‘positively surprised’ with size ◆ Premium paid
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
After the busiest June since 2010, banks are well progressed in the covered funding programmes
Benchmark issuance is running 13% ahead of last year
Burst of deals this year in uneven market suggests investors want alternatives to Treasuries
Central and Eastern Europe earmarked as an area of growth by market participants
More articles
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More from covered bonds
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Bank of Montreal is seeking investor consent to switch from referencing Libor to Sonia on its sterling covered bond, following similar moves from other borrowers. Different calculation methods are emerging for the transition. -
Issuance seized up across most markets last week with lower rated FIG and corporate deals staying clear of the primary market as many participants struggled with a combination of low subscriptions and tight spreads. Subscriptions remain deflated but concessions fell across the board as increased selectivity led to more focus on green/sustainable labels.
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Bank of New Zealand (BNZ) priced an €850m seven year covered bond on Tuesday in line with the bid side of Westpac New Zealand’s deal in the same size and tenor issued last week. Although the order book was thinly subscribed, lead managers deemed the quality of orders high.
