Europe

Sweden’s Stadshypotek on Thursday became only the fourth issuer to launch a benchmark Kangaroo covered bond. Despite an explosion of domestic supply this year the global appetite for Australian dollars remains strong, which bodes well for other Nordic issuers looking at inaugural trades.

The percentage of those bullish on global emerging markets, especially for the short term, has jumped in a survey by Societe Generale

Sampo Housing Loan Bank on Wednesday mandated for the sixth seven year covered bond benchmark of September, and should price the trade on Thursday. Despite a renewed appetite for risk in the wider market, covered bond supply remains consigned to safer names, but a successful auction for the Spanish sovereign could pave the way for further Cédulas.

BPCE has returned to the covered bond market for the second time this year to issue a long dated five year. The transaction was priced with a negligible new issue premium and was broadly distributed to high quality accounts. Though clearly a successful trade, it lacked the sparkle of other higher yielding transactions.

The Federal Reserve’s decision to go ahead with the third round of quantitative easing has boosted some emerging markets currencies

Intesa Sanpaolo has become the second issuer to price a deal through its own government, following UniCredit’s historic trade in August.

France’s Axa Bank has returned to the market after a five months with a €500m seven year Obligation Foncière (OF). Though the transaction is backed by Belgian residential mortgages, it is structured under French law and, while it offers a decent premium against French OATs, the spread to Belgian OLOs is unattractive.

Austria’s Bank für Arbeit und Wirtschaft (Bawag) returned to the covered bond market for the first time in since 2010 on Tuesday, launching an inaugural mortgage backed benchmark.

After a six month absence Banco Sabadell returned to the covered bond market on Tuesday with a two year cédulas. Though it looks like the borrower will successfully raise its target €500m in line with guidance, bankers on the deal warned that the depth of demand for peripheral paper had become too thin to realistically consider another deal until after Wednesday’s German court ruling on the legality of the European Stability Mechanism.

Crédit Agricole and Austria’s Hypo Noe Gruppe Bank launched seven year public sector backed benchmarks on Monday, benefiting from strong domestic support amid an explosion of issuance across the capital markets.

Three European borrowers mandated covered bond deals on Monday, taking advantage of what could end up being only a brief funding window in the wake of the European Central Bank’s announcement last week that it would support peripheral sovereign debt markets.

Moody’s cut Santander Totta’s covered bonds in line with the Portuguese sovereign’s new rating ceiling, which caps all the country’s covered bonds one notch above junk.