Currencies

BNP Paribas will today (Thursday) price a four year covered bond, its fourth of the year, at the ambitious level it was said to have been targeting. Meanwhile, Berlin Hyp nipped into the market.

Total reported purchases under the European Central Bank’s covered bond programme increased almost 150% to Eu585m this (Thursday) morning, the first day on which the data was expected to include any buying in the primary market.

Several covered bond issuers are understood to be circling the market, hoping to pick off tighter levels. However, some are encountering resistance from investors, even if the European Central Bank’s purchase programme continues to underpin the market.

Ahorro Corporación Financiera is said to be preparing an AyT Cédulas Cajas issue for launch next week that could be the biggest test of the covered bond market since the European Central Bank’s Eu60bn purchase programme was announced.

SEB AG this (Tuesday) morning issued a Eu500m three year deal via UniCredit. Meanwhile, the European Central Bank has reported that Eu162m of covered bonds have been purchased under its programme.

Caixa Geral de Depósitos yesterday (Thursday) priced its debut obrigações sobre o sector público, a Eu1bn five year benchmark that achieved strong pricing inside levels initially communicated to investors. Meanwhile Crédit Agricole sized a five year issue at Eu1.25bn yesterday afternoon.

Deutsche Kreditbank on Tuesday priced its inaugural mortgage-backed Pfandbrief, a Eu500m five year deal that was nearly four times oversubscribed. However, the issuer told The Cover it has no plans to move into jumbos.

Crédit Agricole put an end to weeks of speculation that it was preparing a new issue when it launched a five year covered bond this (Thursday) morning, and appears to have been rewarded for its patience with a tight level.

Caixa Geral de Depósitos will this (Thursday) afternoon price its debut public sector covered bond, a Eu1bn five year deal, after Banco BPI reopened the Portuguese sector yesterday (Wednesday). In a reflection of how rapidly spreads are tightening in the market, the deal was launched this morning with guidance set around 10bp tighter than a level syndicate officials had discussed at the beginning of the week.

Banco BPI has closed books on a Eu1bn three year issue as the busy primary market shows no signs of slowing down. Several other candidates are in the wings waiting to tap into the strong demand, although there are signs that investors are not buying just anything they are being shown.

GE SCF won acceptance from European covered bond investors for its debut obligations foncières issue yesterday (Tuesday), pricing a Eu1bn five year deal at 105bp over mid-swaps.