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◆ British lender fixed spread and deal size from outset ◆ Order book closed at over two times the deal size ◆ Fixing terms enabled faster execution, the lender said
◆ 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
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
More articles
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More from covered bonds
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Canada’s Office of the Superintendent of Financial Institutions has removed the temporary increase of the covered bond issuance limit mirroring the Bank of Canada’s earlier decision to remove covered bonds as an eligible asset for repo funding. -
The European Commission’s draft Taxonomy for Sustainable Activities will stymie green bond issuance as it’s based on an unfair system that excludes mortgages on many countries’ most energy efficient buildings.
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Compagnie de Financement Foncier took advantage of Tuesday’s strong market conditions to issue its first covered bond of 2021, and the fifth from Groupe BPCE. The €1.5bn eight year negative yielding transaction, which was larger than expected, partially refinances a series of CFF’s redemptions coming up in the next two months.
