Euro
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Compagnie de Financement Foncier has closed books on the longest dated covered bond since July 2007, a 12 year obligations foncières benchmark via HSBC, Natixis and Société Générale.
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Santander’s Eu1.5bn five year cédulas hipotecarias yesterday (Monday) was the first jumbo since late March and covered bond bankers are hopeful that there will now be further supply given that, with spreads tighter post-ECB, issuers will now be ready to pay the price necessary to tap into buoyant demand for spread product.
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Santander is expected to price the first benchmark Spanish covered bond since June 2008 at the tight end of guidance this (Monday) afternoon, riding a wave of positive sentiment in the market sparked by the European Central Bank’s announcement last Thursday of a Eu60bn plan to buy covered bonds.
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German accounts have been exerting a greater influence on the jumbo covered bond market this week, even if French issuers continued to be the main players and supply remained confined to taps.
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The debut cédulas hipotecarias issued last week by Barclays Bank SA, the Spanish arm of the UK banking group, are part of a wider funding strategy of “maximising securitisability” of the bank’s balance sheet, a treasury official at the issuer told The Cover.
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Caisse de Refinancement de l’Habitat increased its Eu1.2bn October 2017 issue by Eu250m yesterday (Thursday) afternoon, while CIF Euromortgage tapped a Eu1.5bn October 2016 deal for Eu110m.
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Taps are the order of the week in the covered bond market, with at least four expected to have been completed by tomorrow (Friday).
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Two obligations foncières issuers yesterday (Thursday) tapped outstanding deals, while a third French institution this week placed covered bonds with dollar investors.