Euro

National Bank of Canada extended its euro curve by two years and priced its second euro covered bond, a €1bn seven year benchmark, on Tuesday. It looked cheap versus its previous deal, but fair value to where other Canadian transactions were trading on Tuesday.

AIB Mortgage Bank has mandated leads for a seven year covered bond to be launched on Wednesday, subject to market conditions. Meanwhile, Aktia Bank has picked leads for a covered bond roadshow starting next week.

Deutsche Pfandbriefbank (Pbb) returned to the covered bond market on Tuesday to issue a €500m five year benchmark. The book attracted over €1.1bn of demand, a stronger performance than the disappointing eight year benchmark that it priced in January.

Deutsche Pfandbriefbank (Pbb) mandated Dekabank, DZ Bank, Natixis, NordLB and UniCredit on Monday to lead manage a €500m five year mortgage backed Pfandbrief.

NIBC Bank is planning to launch a second deal off its conditional pass through programme (CPTP) after mandating leads for a roadshow. The issuer’s outstanding deal has performed, but only after a fairly long period of time had elapsed, said bankers.

Moody’s upgrade of Irish covered bonds will expand the universe of demand. The rating action should underpin the Irish ACS market’s recent outperformance, that has been led by the Bank of Ireland’s recent five year. However, despite the real estate market stabilising, two Irish banks were downgraded due to persistent asset quality challenges.

Westpac has issued its first euro denominated covered bond deal of the year and the second from an Australian issuer. The transaction was modestly oversubscribed as bank treasuries were absent due to the fact the bond is ineligible for bank liquidity buffers and for being repo’d with the European Central Bank.

Bank of Ireland returned to the covered bond market on Tuesday to issue its fifth deal since November 2012, when it returned after the Irish sovereign debt crisis. It was well oversubscribed with plenty of orders, but less spectacularly so than on previous issues.

Spain’s CaixaBank took advantage of strong market conditions on Tuesday to issue the country’s second covered bond of the year. The funding took advantage of scarcity at the long end of the Spanish market, and concerns that the other Spanish national champions are more exposed to emerging market risks.

Länsförsäkringar Hypotek (LF Hyp) issued Sweden’s first covered bond deal of the year on Tuesday, having identified solid excess demand in Monday’s deal from Finland’s OP Mortgage Bank. The euro funding was cheaper than what the borrower could have achieved in Swedish kronor.

Fitch is the first of the three major rating agencies to announce changes to its covered bond rating schema and has amended its covered bond rating criteria, taking into account the positive effect of bank resolution regulation.

Finland’s OP Mortgage Bank returned to the covered bond market on Monday to issue a €1bn seven year benchmark. It paid a relatively small new issue premium, reflecting its long scarcity value, the high quality of its deal, and the deal size.