Euro

After launching its first UK covered bond issues backed by UK mortgages, Bank of Ireland told The Cover that, sitting alongside its Irish asset covered securities issuance, the new programme will give it greater funding flexibility.

Unfazed by the new realities of a covered bond market characterised by wider spreads, Groupe Caisse d’Epargne moved quickly to take advantage of a window of opportunity when it saw one to launch its debut issue on Monday. The issuer told The Cover that while conditions might not be ideal, there is no guarantee they will get any better.

Groupe Caisse d’Epargne’s Eu1bn two year debut, priced yesterday (Monday) at 51bp over mid-swaps, offered no relief from the repricing of the covered bond market signalled by recent transactions.

A Eu1.25bn two year deal for Swedish Covered Bond Corp this (Thursday) morning priced 18bp wider than comparable issuance just two weeks ago signalled the repricing of the covered bond market. But while some issuers and investors were rueing the leap in spreads, many bankers were welcoming the new realism being adopted by this week’s borrowers, also including CIBC, Sparebank 1 and possibly an Italian before the week is out.

Hypo Investmentbank is eyeing a Eu1bn maximum deal at the short end of the curve for its inaugural jumbo Austrian Pfandbrief, the bank’s head of funding told The Cover ahead of its roadshow later this month.

CIBC priced a Eu2bn debut issue yesterday (Tuesday) afternoon, successfully tackling the difficult market to show that in spite of Dexia Kommunalbank’s failure to get its jumbo public sector Pfandbrief away on Monday, the primary market remains open.

Sparebank 1 Boligkreditt demonstrated that the five year part of the curve is open to the right deals by pricing a Eu1bn transaction this (Wednesday) lunchtime. The new issue also showed that covered bond issuers may find that paying up is the only way to compete for investors’ attention, as demonstrated by the level at which a potential new issue is being soft-sounded.

HSBC, Natixis, Société Générale and UniCredit have been mandated to hold a European roadshow for HSBC Covered Bonds (France) later this month.

CIBC showed that the covered bond market remains open despite investors’ apparent lack of enthusiasm for Germany public sector jumbo Pfandbriefe this (Tuesday) morning, quickly reaching oversubscription on a new issue. Encouraged by this, Sparebank 1 is entering the market this afternoon with a five year deal.

Caisse de Refinancement de l’Habitat priced a Eu200m increase to its Eu1bn October 2017 issue this (Tuesday) morning, offering some rare long dated supply, albeit in a low profile transaction.