Currencies

The Norwegian issuer successfully priced its first covered bond on Tuesday, a day after Moody’s published a report highlighting Norwegian programmes with a high oil related exposure. Meanwhile, Crédit Agricole mandated leads for its first covered bond of the year.

China’s reported intention to introduce a Tobin tax on foreign exchange transactions has provoked a somewhat typical rush of condemnation. However, some analysts are already pointing out that pros and cons might indeed balance each other out.

Landesbank Hessen-Thueringen Girozentrale (Helaba) returned to the euro covered bond market on Tuesday for its second deal of the year, as Royal Bank of Canada was set to issue the second deal from a Canadian bank in dollars this year. Bank dealers reported more mixed flows in the secondary market compared to last week but sentiment is still positive.

The World Bank last Friday printed in Canadian dollars for the first time in a year, seizing on strong sentiment following the European Central Bank's latest bout of monetary easing.

Russian gas company Gazprom is roadshowing a possible Swiss franc bond, which would be its first in the currency since the EU and US laid down sanctions on several Russian state-owned companies in 2014.

Intesa SanPaolo has captured the strong improvement in peripheral market sentiment with its €1.25bn seven year covered bond issued on Friday which attracted the highest order book of the year. At the same time Sparebanken Sør Boligkreditt has mandated leads for its debut covered bond.

The European Central Bank’s latest raft of stimulus is likely to restrict market-based short term funding and could lower covered bond supply at the short end. But covered bonds are likely to remain the most efficient tool for term funding, said bankers, two of whom confirmed they had heavy pipelines.

National Australia Bank has issued the second dollar-denominated Australian covered bond of the year, and the fourth covered bond in dollars this year.

Van Lanschot Bankiers mandated leads for a roadshow with a view to issuing a euro denominated conditional pass through benchmark.

Eurobank has issued its first covered bond in the private market after recently updating its prospectus. With two other major Greek banks having conducted similar exercises, the road to their rehabilitation in the capital market has become more established, despite rating downgrades.

The first negative yielding covered bond, which was issued on Tuesday by Berlin Hyp, was almost an inevitability. But given the psychological resistance and reputational risk involved in selling such a deal, the outcome was by no means a foregone conclusion. The deal's resounding success should mean more will now follow.

Bell, the Swiss meat producer, returned to the Swiss franc bond market with a Sfr300m nine year note on Tuesday, its first issue in the currency since 2013.