Euro

Speaking to The Cover on Thursday, SEB’s head of treasury management John Wang emphasised the granularity of the book for the bank’s inaugural dollar trade that was launched on Tuesday.

WL Bank priced a €500m seven year Pfandbrief almost flat to mid-swaps on Thursday, to the surprise of some syndicate bankers on the deal.

Deutsche Pfandbriefbank launched the longest German Pfandbrief in nine years on Wednesday, pricing a €500m 15 year deal. The potential for more ultra-long dated deals is limited, but Pbb’s success in an unusual tenor illustrates just how flexible desperate investors have become, said bankers.

Rare issuer WL Bank has picked banks to manage its latest Pfandbrief and is aiming to launch a seven year euro denominated bond as early as Thursday, said bankers.

Santander UK has announced a new deal from its Holmes master issuer RMBS shelf. The prospective deal is likely to offer a significant spread pick up compared to UK covered bonds. And Rabobank has privately placed RMBS issuance from its Obvion subsidiary.

A sharp increase in primary supply is unlikely to appear and save the covered bond market from a dire lack of secondary liquidity, but there are other solutions, bankers told The Cover on Monday. The European Central Bank holds more than €60bn in covered bonds and releasing some of these into the secondary market would ease the pain, they said.

The covered bond market is open for almost any issuer and though its unlikely that activity will pick up quickly, there are a number of potential transactions expected in the coming weeks, bankers told The Cover on Monday.

The subject of SME-backed covered bonds continues to provoke a sharp division of opinion within the industry. And it was a lively topic at the annual covered bond investor conference, held on Thursday in Frankfurt.

Banca Popolare di Milano’s covered bonds face a ratings cut after Moody's downgraded the bank on Thursday. Although BPM’s bonds will remain investment grade, more and more covered bonds are slipping into triple-B territory, said analysts, though structural enhancements could help stop the slide.

ING priced its tightest ever covered bond this week —inside the French sovereign curve. It demonstrated deep demand at the long end despite low yields, said bankers.

ING Bank offered buyers a rare bite of Dutch covered bond supply on Wednesday and launched the country’s first euro benchmark in nine months.

Aareal Bank brought the covered bond market’s third tap of the week on Wednesday, and priced a €125m increase of a mortgage backed Pfandbrief inside mid-swaps. As investors look for more liquidity German borrowers are finding it harder to drum up demand in the private placement market and taps could take up some of the slack, said bankers.