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◆ Largest Czech bank tightened spread by 8bp ◆ Subsidiary of Erste Group announced mandate on Monday ◆ 'Arithmetically, there is no FV', a banker said
Easily dismissed as "fast money" with all the negative implications that can bring in the primary bond market, hedge funds are becoming increasingly important to covered bond issuers
◆ Sterling trade was lender's third tranche of covereds this year ◆ 48bp was in line with fair value, a banker said ◆ Santander UK's first sterling covered since May 2025
Data
Sub-sections
Sub-sections
Deal reviews
◆ Issuer lands in 'the place to be' amid strong demand for covereds ◆ Achieves its largest covered book since at least 2023 ◆ After 7bp tightening the bond was spotted another 2bp tighter to erase new issue concession
◆ Several market currents support new long five years ◆ UniCredit GmbH achieves larger size close to fair value ◆ CRH pushes annual covered funding to €3.15bn
◆ Deal lands flat to recent UK and Canadian trades ◆ Dollar prices find stable footing for issuers and investors ◆ Pricing in line with other currencies
◆ Largest coverage ratio for almost three months ◆ Priced flat to fair value ◆ Slow pipeline predicted for rest of week
Opinion
Easily dismissed as "fast money" with all the negative implications that can bring in the primary bond market, hedge funds are becoming increasingly important to covered bond issuers
The fears of the covered bond market reflect a lack of conviction in the superiority of the product
The preference for a diverse group of lead managers and the convention of reciprocity keep covered bond bookrunning competitive despite concentration so far this year
Rate increases could be closer than you think
Analysis
With masses to fund and spreads super-tight, banks will race to market, but central banks are expected to tighten
Banks could rush to issue as fast as possible, taking advantage of remarkably tight spreads
European and other regulators are working on reforms to make covered bond funding more efficient
Changes to ECB collateral eligibility requirement could lead to more blockchain-based covered bonds, Moody's suggests
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More from covered bonds
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There was a clear shift in pricing dynamics last week with larger movements from initial price thoughts, across all sectors but particularly in the markets that carry higher inherent risk. At the same time though, real estate companies drove up the average concession paid in the corporate sector, but that measure fell in the rest of the primary market. -
A tightening in spreads on senior unsecured bank bonds and wider covered bond spreads has made the latter an even less attractive funding market for issuers which, added to a plethora of additional factors, means that market could be facing its lowest year for issuance in 20.
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Senior and covered bond plans were flowing into the deal pipeline on Monday, with issuers keen to buck the softer tone and print before the start of the summer break.
