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September redemption cash and shortage of supply support investor demand
The single currency stands out as the most attractive funding source while the US dollar market remains open in size
Higher than normal levels of redemptions and the prospect of pre-funding could make the rest of 2026 busy for the primary market
Data
Sub-sections
Sub-sections
Deal reviews
◆ Strong local demand shows eagerness to buy Aussie covereds at new, tighter levels ◆ RBC prices in line with CIBC's reopener of dormant sector ◆ Onshore demand seen supporting issuance up to five years
◆ RBC to follow compatriot CIBC with five year public deal ◆ Earlier trade 'corrected' scarce supply, achieving high oversubscription ◆ Both banks appear ahead of expected local regulatory changes to covered bond treatment
◆ 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
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
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
Benchmark issuance is running 13% ahead of last year
More articles
More articles
More from covered bonds
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Nordea has made extensive use of Nordic currency covered bond markets through the coronavirus crisis and, as spreads have stabilised, has selectively issued senior preferred deals across a broad range of other FX. The bank says it has plenty of time to meet its regulatory funding needs and has no imminent plans to issue subordinated debt given the recent relaxation of capital requirements. -
Estonia’s LHV Pank sold its first covered bond on Tuesday, attracting very good demand for the sub-benchmark deal, which provided it with long term funding from new investors.
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Deutsche Hypo took advantage of the public Pfandbrief market before the coronavirus crisis struck and since then has been busy issuing privately placed senior deals. Spreads have since tightened, which should help issuance bounce back. But ready access to favourable European Central Bank repo funding means supply will be restricted. Some parts of the German commercial real estate market are likely to be facing trouble too, but even so, Pfandbrief investors are well protected.
