Europe
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After the disastrous reception of Royal Bank of Canada’s seven year covered bond on Wednesday, SCBC followed with another seven year on Thursday. The infrequent issuer raised half the amount than SEB and paid 5bp more, but did the right thing by not compounding the problem left by RBC.
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Yorkshire Building Society showed RBC how to syndicate a deal on Thursday, choosing a maturity, size and spread that made sense from the start.
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SCBC mandated leads for a seven year covered bond on Wednesday, the second in that tenor from Sweden and the third in that tenor overall this week. The transaction comes as RBC struggled to build strong demand for its seven year after Bund yields soared. Yorkshire Building Society has responded to concerns around volatility and mandated leads for a shorter maturity.
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200 years might have passed since Napoleon was defeated at Waterloo. But some things in war — and finance — do not change, such as the absolute importance of being ahead of the game. Nathan Rothschild cleaned up on the Gilt market thanks to his rapid, reliable, and finely honed communications system that brought him news of Wellington's victory ahead of anyone else in Westminster and the City.
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China
With China’s trading volume with Germany the same size as its volume with France, the UK and Italy combined, it is not just the German exporters who are beginning to benefit. Chinese investment in Germany has also become a trend too important to ignore. Philip Moore reports. -
Skandinaviska Enskilda Banken returned to the covered bond market on Tuesday after an 18 month absence to print a €1bn deal with a longer maturity, tighter spread and lower new issue premium than Toronto Dominion was able to do a day earlier.
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Compagnie de Financement Fonciere (CFF) has issued the first euro denominated three year conventional covered bond this year. Until recently, short dated covered bonds were trading with a negative yield in euros, something which made them impossible to sell. CFF’s trade has proved that this tenor is now open.
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Skandinaviska Enskilda Banken AB (SEB) has mandated leads for its first covered bond since October 2013 and the third only Swedish deal to be issued this year. The deal is likely to offer three times the coupon of the previous Swedish covered bond.
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Unión de Créditos Inmobiliarios’ has issued the first Spanish RMBS since 2007. Meanwhile, ING made its first appearance in two years with an RMBS backed by better quality collateral than many covered bonds, and with a much fatter spread.
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ABN Amro this week issued the first FIG senior green bond in euros, pricing at what, by recent standards, was a slim premium to its secondary curve despite less than favourable market conditions.
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