Currencies

When National Bank of Greece announced a buyback last month, many market participants felt it would be a one off. But soon after Portugal’s BPI launched its own tender and because that market is slightly bigger, bankers said a handful of issuers might well consider a similar exercise. Now Spain’s Caixabank has followed suit by announcing a tender. Given the large €360bn size of the Cédulas market, it’s fair to assume that the potential for ALM exercises is much greater than had previously been assumed.

Erste Group Bank comfortably printed €1bn off the back of the largest ever book for an Austrian covered bond on Wednesday. The successful 10 year offering has opened the door for other Austrian names and put to bed negative headlines following the sovereign’s recent downgrade.

Erste Bank launched the first Austrian benchmark of 2012 on Wednesday. It was also the first Jumbo trade from the region since last May.

A day after Santander said it would not need to access wholesale markets this year, the bank surprised the market and broke the seven month cédulas drought with a blow-out €2bn three year.

Sparebanken Vest Boligkreditt (SVB) uncovered €1.6bn of demand in one hour and priced the tightest Norwegian deal this year on Tuesday. Meanwhile, Erste Bank is looking to issue a new 10-year.

Bank of New Zealand convinced over 117 investors to participate in a three times oversubscribed trade on Monday. The surge of demand for the three year deal took leads by surprise, and market participants expect other non-European names to take advantage of investors’ hunger for the short end.

The ECB's Long Term Refinancing Operation could increase the bid for covered bonds through its restorative effect on the senior unsecured market.

Bank of New Zealand returned to the market on Monday with a long three year benchmark, after postponing a five year trade earlier this month. The change of maturity and capped deal size yielded a far more positive result, with over 100 accounts contributing to the most oversubscribed order book of the year.

Barclays Capital’s new fiscal strength covered bond indices, which adjust the market value weighted exposure of country risk based on fiscal strength, have won the support of investors polled by The Cover.

Issuers could hardly hope for a better backdrop to bring benchmark deals. Bond yields are falling and investors are looking to put cash to work across a swathe of asset classes to capitalise on the rally, as seen most emphatically in the senior unsecured market this week. Yet Norway’s Sparebank Vest Boligkreditt remains the only obvious candidate for a deal next week.

Sparebank 1 Boligkreddit convinced over 110 accounts to participate in the first publically syndicated seven year covered bond in almost six months.

Sparebank 1 Boligkreditt priced a €1.25bn seven year trade on Tuesday at the tight end of guidance, taking year to date Norwegian supply to over €4bn.