Euro

Commerzbank opened books for a €1bn five year mortgage Pfandbrief on Monday, and was set to issue in line with the spread achieved by Compagnie de Financement Foncier (CFF), which issued a deal of the same tenor two weeks ago. The pricing shows that there is no longer a spread between French and German covered bonds.

Covered bonds backed by environmental and social governance (ESG) mortgage loans are expected to become an important component of the booming socially responsible investment market following a ground-breaking Pfandbrief issued this week by Münchener Hypothekenbank (Muhyp). But bringing trades to market will not be without its challenges.

The ECB will refrain from aggressive purchasing during the third covered purchase programme (CBPP3). Ulrich Bindseil, director general of market operations at the European Central Bank, the lead architect of the programme, told The Cover in an exclusive interview that he expects CBPP3 to lead to tighter spreads which will encourage more issuance.

Toronto-Dominion has mandated leads and announced initial price thoughts for its first benchmark US dollar covered bond under Canadian legislation.

The Spanish housing market has started to stabilise as the fall in the value of repossessions has steadied, and house prices have begun to rise for the first time in seven years, according to a report published by Fitch on Thursday.

The ECB announced it has allotted €82.6bn to 255 banks in the first targeted long term refinancing operation (TLTRO) — a figure far below consensus expectations from eurozone economists. While the impact on covered bond secondary markets is likely to be marginal, the news could have positive implications for primary supply, analysts told The Cover on Tuesday morning.

Danske Bank opened books on Wednesday on a triple-A rated five year euro benchmark, its second euro deal of the year coming soon after its seven year sterling transaction early last week. A solid book build blew away Tuesday’s concern that a soft credit market and a series of upcoming potentially disruptive events may have turned the deal sour.

Münchener Hypothekenbank (Muhyp) has priced the first covered bond backed by environmental and social governance (ESG) mortgage loans. The €300m deal attracted a rich new seam of demand from investors that had never bought covered bonds from this issuer, in a move that is expected to spur other borrowers to consider ESG covered bond deals of their own.

Hypo Tirol has mandated leads to roadshow its inaugural syndicated €300m public sector backed Pfandbrief starting this week.

Danske Bank has mandated leads for a five year euro benchmark, its third benchmark this year and second in euros. The deal is expected to be launched on Wednesday.

Royal Bank of Canada (RBC) mandated and launched the fifth US dollar covered bond benchmark of the year on Tuesday. The issuer followed the lead of Bank of Nova Scotia which priced the first US dollar denominated Canadian covered bond a fortnight ago.

Belfius Bank has mandated leads to roadshow its inaugural public sector backed covered bond programme and the first ever issued under Belgian law.