Euro

Norwegian lender, SR-Boligkreditt issued its first euro covered bond on Monday, a €500m five year. The transaction offered a tempting spread pick-up to where Sparebank Vest issued an identical transaction last week thereby ensuring a strong reception, despite challenging market conditions.

Westpac's New Zealand subsidiary has appointed leads for its first euro covered bond, and the second from New Zealand, of the year. The transaction is expected to price on Tuesday.

Several covered bond issuers need to get up to speed with their funding plans before the start of October, though investor appetite is anaemic and set to wane further. And, with the probability of a Fed’ rate hike this year being underestimated by the market, a spike in rates volatility is expected.

The European Covered Bond Council (ECBC) said on Thursday that borrowers holding the covered bond Label had agreed to report on a common basis from next year using its Harmonised Transparency Template (HTT). HTT will enable investors to compare different covered bonds on a like-for-like basis using the Covered Bond Label Platform, and comes in response to the European Commission’s Capital Markets Union initiative.

Four out of five of this week’s covered bond trades were only just subscribed and, of the 20 issued so far this month, nearly 50% of them scraped through bookbuilding. Even though conditions look increasingly unreceptive to further supply, issuers that still have funding needs would rather move sooner than later as they fear spreads and yields will go higher as a result of the recent glut of supply.

Caja Rural de Castilla-La Mancha (CRCLM) completed a series of meetings last week and has mandated leads for its first deal, a six year that is to be launched on Tuesday.

ING in the Netherlands has won the consent of investors to amend terms of 10 covered bonds from a hard to soft bullet maturity. The result comes after a number of changes to the documentation of its larger and more established programme. The alternative €5bn soft bullet programme will only ever be used for placing bonds internally, the issuer confirmed .

The Belgian covered bond issuer has appointed lead managers for a roadshow with a view to issuing a euro benchmark, its second ever.

The Austrian covered bond issuer has completed a series of investor meetings that finished on September 18 and will launch a five year deal on Tuesday.

Credit Mutuel Arkéa issued a covered bond for the first time since June 2013 on Wednesday, but despite its rarity, it was compelled to offer a wide spread given the weak market conditions.

Covered bonds are the only asset class to have provided investors with a positive total return this year according to the independent index provider, Markit. However this positive picture is somewhat counterbalanced by data from e-trading platform, MarketAxess, which shows traded volumes are down sharply.

Deutsche Kreditbank just managed to raise €500m of eight year funding on Tuesday with a public sector pfandbrief. The transaction only just managed to get over the finishing line but in the current ‘dull and shaky’ market conditions, this was good enough.