Euro

Crédit Agricole reported on Tuesday that it had bought almost as many covered bonds as it sold in last week’s dual tranche issue, and has therefore kept its funding structure stable.

Van Lanschot Bankiers managed a smooth execution for its second ever covered bond deal on Tuesday, a transaction that was at risk of being postponed after attacks in Brussels.

Polish banks, hoping to take advantage of the new covered bond law which came into effect this year will need to work hard to overcome investor concerns regarding their Swiss mortgage loan exposures, which Moody’s said would significantly undermine investor confidence.

Van Lanschot Bankiers announced its intention to proceed with a conditional pass through deal on Tuesday and, following Credit Agricole’s recent 15 year, and a string of well performing peripheral deals, another opportunistic issuer could be tempted to move at short notice with a deal at the long end of the curve.

Natixis has appointed its new global head of debt capital markets for financial institutions.

Crédit Agricole issued the biggest euro covered bond benchmark since 2007 this week, achieving a competitive cost of term funding at historically cheap rates. Apart from the ECB’s new stimulus measures which helped demand, the deal size was somewhat enlarged by the bank’s recent tender according to Nadine Fedon, CEO of Crédit Agricole Home Loan SFH.

UK covered bonds have not tightened alongside covered bonds from other jurisdictions in recent weeks, but they have not yet seen any real selling either. While it seems likely the UK market would be sold following a potential Brexit, this should provide a buying opportunity given that the market should not widen any further than Canada.

WL Bank issued a €500m mortgage backed seven year on Thursday, paying a limited concession with a high level of demand.

Three euro benchmarks surfaced on Wednesday including the first from Axa in four years, the first euro benchmark from BRFkredit and a dual tranche deal from Crédit Agricole which, by virtue of its €3.25bn size, is the most notable deal of the year so far. Despite these successes, traders fear the spread tightening run may be close to its end.

Concerns over regulation and liquidity mean ABS issuers are turning more to covered bonds this year, though there is hope that 2016 will see an increase in capital relief trades, according to panellists at IMN’s Global Covered Bond conference, held in London on Monday.

Spanish covered bond issuers have been busy updating the valuations of their Cédulas pools and removing ineligible loans which have been structured into RMBS, said Moody’s. The process takes the Spanish covered bond market closer to meeting the European Banking Authority’s best practice guidelines and will stand issuers in good stead for when Spain unveils its new covered bond law.

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.