Currencies

Münchener Hypothekenbank (Muhyp) has priced the first covered bond backed by environmental and social governance (ESG) mortgage loans. The €300m deal attracted a rich new seam of demand from investors that had never bought covered bonds from this issuer, in a move that is expected to spur other borrowers to consider ESG covered bond deals of their own.

Hypo Tirol has mandated leads to roadshow its inaugural syndicated €300m public sector backed Pfandbrief starting this week.

Danske Bank has mandated leads for a five year euro benchmark, its third benchmark this year and second in euros. The deal is expected to be launched on Wednesday.

Royal Bank of Canada (RBC) mandated and launched the fifth US dollar covered bond benchmark of the year on Tuesday. The issuer followed the lead of Bank of Nova Scotia which priced the first US dollar denominated Canadian covered bond a fortnight ago.

Belfius Bank has mandated leads to roadshow its inaugural public sector backed covered bond programme and the first ever issued under Belgian law.

Hypo Noe priced its inaugural €500m Austrian mortgage-backed Pfandbrief on Monday through the bid side of its interpolated public sector curve, and with barely any sensitivity in the book. The strong result is a testimony to the enhanced demand for all covered bonds that offer a spread over mid-swaps and anything that is potentially eligible for the forthcoming European central bank purchase programme.

The European Central Bank's Targeted Long-Term Refinancing Operation (TLTRO), which will be launched on September 18, is unlikely to kick-start bank lending in southern Europe, said Fitch on Monday.

Credit Suisse (CS) opened books on Thursday for its second seven year euro deal of the year. Leads ascribed the 3bp pickup offered against Wednesday’s Bank of Nova Scotia (BNS) deal to the Swiss bank’s lack of LCR eligibility.

Westfälische Landschaft Bodenkreditbank (WL Bank) opened books on Thursday on an AAA rated €600m no-grow 10 year mortgage-backed Pfandbrief, its second deal of the year and the fifth 10 year print to come out of Germany in 2014. In contrast to Aareal Bank’s deal on Wednesday WL’s order book was oversubscribed many times.

Abbey National returned to the euro covered bond market for the first time this year on Thursday, following the same dual tranche format that Nationwide and Helaba have successfully established. Though UK bonds are unlikely to be eligible for the European Central Bank’s forthcoming purchase programme, both tranches priced with a negligible new issue premium with well oversubscribed and granular demand.

Hypo Noe has mandated leads for its inaugural mortgage backed Pfandbrief, to be launched next week.

Bank of Nova Scotia was set to price the tightest and longest Canadian covered bond issued in euros on Wednesday. It was also the tightest spread for any non-German seven year seen this year, and at €1.5bn the largest in that tenor.