DZ Bank

Covered bond borrowers in the UK, Sweden, France, New Zealand and the Netherlands met with strong receptions for their transactions this week, which collectively raised nearly €6bn.

The European Union proved that for the right issuers there is considerable demand at the 15 year point of the curve, with the Joint Länder planning a return to the market with a seven year benchmark for the first time since a mooted deal in February stalled.

The European Investment Bank built a book of €8bn for a 10 year Earn on Tuesday as the 10 year Bund yield fell to a 12 month low, leading bankers on the deal to suggest tougher times may lie ahead for euro issuers.

United Overseas Bank sold a landmark transaction this week, printing the first euro-denominated covered bond from Asia, and plans to become a frequent issuer in the market.

The smallest of Wednesday’s three corporate bond issues in Europe was Grenkeleasing’s €125m 5.1 year bond, led by BayernLB, Commerzbank and DZ Bank.

Deutsche Bahn printed a €500m 10 year no-grow bond on Monday, a deal that achieved aggressive pricing but did not tighten beyond its guidance stage.

The covered bond market could see the second Singaporean deal soon, with United Overseas Bank (UOB) mandating leads for a series of European investor meetings that could result in its first deal.

Austria has printed €5bn in a dual tranche issuance, pricing in 10 and 30 year tenors as the sovereign took advantage of a window of opportunity arising from a rally in global equities.

AIB Mortgage Bank attracted robust demand for its €1bn seven year covered bond issued on Thursday, and WL Bank also did well despite the difficult 10 year tenor and measly spread.

The State of Baden-Württemberg announced on Tuesday its intention to print a 10 year euro benchmark in a week in which investors await a decision on Thursday from the European Central Bank regarding interest rates.

Five issuers from core Europe priced covered bonds this week but the standout success, which could have been priced without the European Central Bank’s help, was the first Austrian deal of the year from Erste Bank.

Kathrein, the German communications technology manufacturer, has signed a €350m revolving credit facility for refinancing purposes.