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Come May, current dollar market's gain may turn into euro pipeline's pain
All three 2026 dollar covered bonds issued in past fortnight as issuers adapt to market conditions
Swiss franc covered bond from Kiwibank the only deal on Thursday after a similarly patchy week
Data
Sub-sections
Sub-sections
Deal reviews
◆ Issuer tightens spread by 4bp ◆ Stronger opening on Wednesday paved way for covered ◆ Deal offered some new issue premium
◆ Bond the first EuGB covered ◆ Danish issuer tightens spread by 5bp ◆ Issue offers next to no concession
◆ Canadian bank last issued covered paper in January ◆ Lead managers picked only one comp ◆ BNS has large covered redeeming on Monday
◆ Banker said deal offered little new issue premium ◆ Euro transaction on Tuesday triggered the deal ◆ Lloyds' last sterling covered was issued in October 2025
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
All three 2026 dollar covered bonds issued in past fortnight as issuers adapt to market conditions
Swiss franc covered bond from Kiwibank the only deal on Thursday after a similarly patchy week
Shrinking books 'nothing to complain about' as market values quality not quantity
Underlying concerns among investors and issuers about covered bonds force them to the sidelines
More articles
More articles
More from covered bonds
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ANZ has altered the pre-maturity test of the hard bullet transactions in its covered bond programme, by doubling the time the covered bond guarantor has to sell assets. The "investor-friendly" update, which improves rating stability, follows ANZ’s recent downgrade and could be of interest to other issuers in a similar situation. -
Tight trading levels will make covered bonds an attractive asset class for statement trades and issuers outside of the euro area, but market participants say that this is unlikely to be enough to lift overall supply volumes out of the doldrums in the second half of 2020.
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Surging redemptions and aggressive buying by the ECB — which is also offering issuers a cheaper funding alternative — mean a reduced supply outlook for the covered bond market and, therefore, ever tighter spreads. But higher yielding, safer alternative investments are on the horizon, meaning the asset class may soon lose its allure.
