Covered Bonds - All Articles

  • Spanish mortgage reform fear for Cédulas investors

    Changes to Spanish mortgage law could hit holders of Cédulas as more households will become eligible for mortgage renegotiations through debt-for-asset swaps, and over-collateralisation could fall as mortgages are cancelled. The Ministry of Economy outlined the changes on Wednesday.

    • 31 Jan 2013
  • Investors favour Swiss triple trancher

    Pfandbriefbank der Schweizerischen Hypothekarinstitute (PSHypo) priced a three tranche Swiss franc transaction on Thursday morning. It launched a new five year line, along with re-openings of 10 and 16 year bonds. Unusually for a Pfandbriefbank trade, investors focused on the shortest of the three tranches.

    • 31 Jan 2013
  • Fund manager Q&A: Investors struggle to change mandates

    A Frankfurt-based asset manager, with more than €20bn in covered bonds under management, spoke to The Cover, on condition of anonymity, on Thursday about the good environment for higher yielding debt, the prospect of German insurers’ absolute return targets being lowered soon and the changing nature of investment mandates, which will favour innovative secured products such as the SME structure being pioneered by Commerzbank.

    • 31 Jan 2013
  • Asset managers get taste for periphery CB

    Asset managers have been buying into covered bond deals in greater quantities this month, according to data from The Cover. Their bid has been particularly strong in issues from peripheral Europe, and has come at the expense of central bank participation, which has halved.

    • 30 Jan 2013
  • Life after DexMA — CFFL ready for work

    The new French covered bond municipal financing agency, Caisse Française de Financement Local, will begin operations on Thursday (January 31). Its first benchmark issue could be seen as early as the third quarter. Bankers believe the newly issued bonds should trade in line with the tightest French covered bonds.

    • 30 Jan 2013
  • Public-sector CBs riskier than mortgage-backed, says Moody’s

    Average cover pool losses from public-sector covered bonds are higher than those of mortgage programmes for the first time since Moody’s first published its quarterly monitoring overview in 2009, the rating agency said in the latest of the series. The data also shows a quarter of all programmes still face a downgrade if their issuer was downgraded by just one notch.

    • 30 Jan 2013
  • South Korea set for covered bonds in 2013

    South Korea could have its covered bond law in place by September, after its National Assembly puts it to the vote next month. The country’s cabinet has approved the draft covered bond bill for a February vote. Enactment could follow within six months.

    • 29 Jan 2013
  • Berlin Hyp makes hard work of jumbo

    Berlin Hypothekenbank (BHH) struggled to sell a €1bn mortgage Pfandbrief at its target spread after opening books at the wide end of initial price thoughts, at 1bp through mid-swaps, on Monday. The tight level surprised bankers, due to the recent decreasing bid for core names offering slim yields and even slimmer premiums.

    • 29 Jan 2013
  • Germans bide their time

    Berlin Hypothekenbank has mandated banks for a jumbo five year Pfandbrief and at least one other German name is circling the market. However, bankers told The Cover that issuers will wait for the market to shake off its fatigue before further deals emerge.

    • 28 Jan 2013
  • SNS weaker despite strong cover pool

    SNS Bank’s covered bonds are under selling pressure, due to increasing concern about its overall financial health. Covered bond investors are likely to remain at risk of further mark to mark losses but the risk of a payment disruption is highly remote.

    • 28 Jan 2013
  • Periphery juice diverts attention from core CB names

    Excellent funding conditions drew more covered bond issuers from core Europe to the market this week, with impressive deals done at aggressive spread levels. But bankers cautioned that new issue premiums may have to rise with juicy spreads from peripheral Europe drawing investors’ gaze.

    • 25 Jan 2013
  • ANZ issues first in sterling covered with short FRN

    ANZ Bank this week priced its first short dated sterling floating rate covered bond in what was also the first such deal since last May.

    • 25 Jan 2013
  • Spanish January highlights hunt for yield

    Cédulas have dominated covered bond issuance so far in 2013, aided by a remarkable rally that has seen nine deals printed this week. However, oversubscription rates have dwindled this week, and both core and periphery issuers may need to increase what they offer investors to get their attention in a crowded market.

    • 25 Jan 2013
  • CFF hits hungry market and keeps repo eligibility

    Compagnie de Financement Foncier supplied the covered bond market with rare French issuance when, on Thursday, it increased its 2.375% November 2022 by €750m to €1.75bn through joint leads Barclays, BNP Paribas, JP Morgan, Natixis and RBS.

    • 25 Jan 2013
  • AIB and Kuxta show periphery how it’s done

    Four peripheral issuers brought covered benchmarks over the last week, but with very different outcomes. While AIB Mortgage Bank and Kuxtabank got excellent receptions, Santander and Bankinter set their own terms and left investors licking their wounds.

    • 25 Jan 2013
  • AIB and Kuxta show periphery how it’s done

    Four peripheral issuers brought covered benchmarks over the last week, but with very different outcomes. While AIB Mortgage Bank and Kuxtabank got excellent receptions, Santander and Bankinter set their own terms and left investors licking their wounds.

    • 25 Jan 2013
  • Conditions good despite mixed deal performance

    This week’s primary deals have posted a mixed performance, but with the market backdrop still supportive, there is a lot of confidence that spreads will stabilise for the less well placed deals that were seen this week.

    • 25 Jan 2013
  • KBC and Belfius down to ‘insane’ spreads

    KBC Bank and Belfius Bank achieved incredible results this week in terms of their spread levels, which now rival not just the best French covered bond names, but the French and Belgian governments as well.

    • 25 Jan 2013
  • Periphery juice diverts attention from core CB names

    Excellent funding conditions drew more covered bond issuers from core Europe to the market this week, with impressive deals done at aggressive spread levels. But bankers cautioned that new issue premiums may have to rise with juicy spreads from peripheral Europe drawing investors’ gaze.

    • 25 Jan 2013
  • KBC and Belfius down to ‘insane’ spreads

    KBC Bank and Belfius Bank achieved incredible results this week in terms of their spread levels, which now rival not just the best French covered bond names, but the French and Belgian governments as well

    • 25 Jan 2013
  • KBC chases Belfius out to 10 years

    KBC Bank was on Thursday morning set to price its second-ever covered bond, following Belfius Bank out to the 10 year maturity but with a larger €750m deal that priced just inside its Belgian rival.

    • 24 Jan 2013
  • Four deals boost primary momentum

    The primary market picked up momentum on Thursday with three benchmark deals and one benchmark sized tap being syndicated. ANZ, Bankinter, KBC and Compagnie de Financement Foncier (CFF) unearthed a over €3bn of demand.

    • 24 Jan 2013
  • ANZ to issue first sterling benchmark

    ANZ looks set to price the first sterling FRN since last May and its first ever covered bond in that currency. It has returned to the covered bond market for the first time this year to take advantage of swelling demand in sterling.

    • 24 Jan 2013
  • Terra BoligKreditt goes long

    Terra BoligKreditt became the second Norwegian issuer to supply the market this year and the fifth overall to come with a 10 year or longer maturity. The long maturity, despite being more expensive than a five year, will build its curve and should attract new investors.

    • 23 Jan 2013
  • It's the credit, stupid

    Market conditions are strong and it seems that almost any FIG issuer can do a deal. But that doesn't mean they can take liberties. Investors can be forgetful, but more often they remember when they have been taken for granted.

    • 23 Jan 2013
  • CFF tap fuels ECB eligibility debate

    Compagnie de Financement Foncier (CFF) has mandated leads for an increase of its November 2022 issue. Its decision to tap may reflect concerns that newly issued benchmarks may not be eligible for repo with the European Central Bank (ECB).

    • 23 Jan 2013
  • Pbb comes home to Pfandbriefe after senior stint

    Deutsche Pfandbriefbank (Pbb) was back in more familiar territory on Wednesday as it launched its first Pfandbrief of 2013, having been busy setting up a new senior unsecured curve in recent months.

    • 23 Jan 2013
  • Rabobank issues first Dutch RMBS of 2013

    Rabobank’s subsidiary, Obvion, looks set to price the first Dutch syndicated RMBS of the year at the tightest levels since the crisis. Despite that, the headline spread will be nearly ten times wider than where a putative covered bond deal would price.

    • 22 Jan 2013
  • DG Hyp returns with skinny seven year

    Deutsche Genossenschafts-Hypothekenbank was in the Pfandbrief market for the first time in more than six years on Tuesday, selling a €500m seven year that followed other German deals this month in hugging the mid-swaps level.

    • 22 Jan 2013
  • AIB plays it safe with more short funding

    AIB Mortgage Bank and Deutsche Genossenschafts-Hypothekenbank followed Santander and Belfius on Tuesday with €500m trades that were both easily absorbed. AIB was able to fund itself much more cheaply than its previous deal but bankers felt it could have easily issued a longer maturity.

    • 22 Jan 2013
  • DG Hyp adds to busy Tuesday

    Deutsche Genossenschafts-Hypothekenbank has hired banks for a mortgage Pfandbrief, which is pencilled in for Tuesday. It may have company from Commerzbank, which The Cover understands is also eyeing Tuesday for Europe’s first ever SME structured covered bond.

    • 21 Jan 2013
  • Santander goes for size with largest deal of the year

    Banco Santander’s first covered bond for nearly a year, a €2bn five year, surprised the market by hitting the middle part of the curve on Monday. The spread did not change from initial price thoughts to final terms, which showed the plan had been to take a large chunk out of the market, bankers told The Cover.

    • 21 Jan 2013
  • Belfius tests sub sovereign appetite

    Belgium's Belfius Bank took advantage of a strong market on Monday to launch its second ever deal. Even though the transaction looks set to be priced through both Belgian and French government bonds, there was little price sensitivity in the book.

    • 21 Jan 2013
  • Sustained squeeze on the way

    Covered bond investors hope to increase holdings this year, even with supply expected to shrink, according to Fitch. However investors said they would decrease Cédulas holdings, despite this sector being the most vibrant so far in 2013.

    • 21 Jan 2013
  • FIG rally rides out wobble as Santander pushes maturity

    The senior unsecured and covered bond markets supported a number of well-bought deals this week, as investors appeared willing to keep the FIG rally rolling on through some softening of new issues.

    • 18 Jan 2013
  • Kreditbank follows German peers towards zero spread

    Deutsche Kreditbank, a wholly owned subsidiary of BayernLB, contributed to a trickle of super-tight Pfandbriefe from German names on Friday when it set the spread on a €500m public sector deal at 3bp over mid-swaps.

    • 18 Jan 2013
  • Peripheral covered issuance leads the way

    Of the 13 European covered bond deals that have priced so far this year, more than half have been from the periphery markets. In the last week alone, four Spanish deals, two Italian transactions and the first Portuguese issue since the onset of the eurozone crisis were priced.

    • 18 Jan 2013
  • DNB leads the way for much depleted core

    Just three transactions were priced from Europe’s core regions this week. But by this time last year 22 benchmark issuers had raised nearly €30bn between them and not a single one was from the periphery.

    • 18 Jan 2013
  • Kutxabank joins Spanish fiesta

    The Spanish party continued on Friday when Kutxabank opened books for the fifth Spanish covered bond of the year. Demand for the no-grow €750m four year Cédulas trade was exceptionally strong, paying testimony to the high level of Cédulas redemptions as well as a renewed appetite for risk. But alongside those factors, the bank and its collateral pool are fundamentally sound. Belfius Bank has mandated joint leads for a 10 year.

    • 18 Jan 2013
  • Isbank looks to eurolira and covered bonds

    Isbank’s deputy CEO, Erdal Aral, has told The Cover that the bank is planning to issue Eurolira bonds, dollar bonds and covered bonds in 2013 — and that these three instruments are likely to feature in most large Turkish banks’ funding plans this year.

    • 17 Jan 2013
  • Market still good for new deals after BBVA

    Despite order inflation concerns and fears of profit taking on older peripheral deals that are now trading back above par, the covered bond market remains good for new issues, such as BBVA's 10 year launched on Thursday and Kuxtabank's four year, which was mandated on Thursday, bankers told The Cover.

    • 17 Jan 2013
  • Let's hear it for pass-through covered bonds

    A covered bond that offers identical credit quality to any other but which is immune from rating volatility should prove a boon to both investors and issuers. A pass-through structure would achieve just that, and NIBC’s decision to explore it should be applauded.

    • 16 Jan 2013
  • Q&A with Banco Popular Español, Santiago Armada

    Santiago Armada, head of funding at Banco Popular Español, talks to The Cover about this week’s €500m six year covered bond issue, as well as the general situation in Spain and his bank’s approach to refinancing LTRO liquidity.

    • 16 Jan 2013
  • Isbank looks for eurolira, dollars and covered bonds

    Isbank’s deputy CEO, Erdal Aral, has told EuroWeek Emerging Markets that the bank is planning to issue Eurolira bonds, dollar bonds and covered bonds in 2013 — and that these three instruments are likely to feature in most large Turkish banks’ funding plans this year.

    • 16 Jan 2013
  • Intesa goes long with high quality book

    Intesa Sanpaolo is set to price the longest covered bond of the year so far at over 100bp through the Italian sovereign and on the back of a stunning, high quality book. The result could have been expected given the very supportive technical backdrop, but the market environment is not as conducive as last week.

    • 16 Jan 2013
  • DNB safely away despite drop in demand

    DNB Boligkreditt returned to the market on Tuesday with a €1.5bn five year covered bond priced flat to its curve. Execution was straightforward but the deal did not attract as much demand as DNB’s previous five year — highlighting increased investor reservations about the less generous spread now on offer.

    • 15 Jan 2013
  • Deutsche Hypo back on track with €500m five year

    Deutsche Hypothekenbank was set to price a €500m five year mortgage backed Pfandbrief early on Tuesday afternoon from an order book of close to €600m. The deal was modestly oversubscribed, compared with Aareal Bank’s five year on Monday, but it was an improvement on Deutsche Hypo’s previous outing last September.

    • 15 Jan 2013
  • Popular gets longest funding for tier two issuer

    Banco Popular Español has added to a succession of covered bonds from peripheral countries this year issuing the longest tenor for any Cédulas issuer since 2010 and in the process attracting over 100 investors. BPCE has also tapped the covered bond market.

    • 14 Jan 2013
  • Aareal shows strength of Pfandbrief

    Aareal Bank has issued the first Pfandbrief of the year, attracting a comfortably oversubscribed book and pricing flat to its curve. Despite the appetite for high yielding risk, the deal showed that there is still plenty of appetite for core covered bonds, ­even if they are backed a high proportion of commercial loans from outside Germany.

    • 14 Jan 2013
  • NIBC tries to bridge the great ABS-covered bond divide with pass-through

    The worlds of securitisation and covered bonds are colliding as issuers and investors wrestle with rating volatility. With Commerzbank preparing its ground-breaking SME structured covered bond, which relies on a pass-through structure traditionally used in securitisations, NIBC is looking at a new covered bond programme that would feature a similar structure, writes Bill Thornhill.

    • 11 Jan 2013
  • Hat meets rabbit

    Every European FIG issuer to have pushed the boundaries this year has been successful. But for the market rehabilitation to continue real change is needed.

    • 11 Jan 2013
  • Fabulous Friday as CGD and Sabadell step in, Aareal follows

    The covered bond market got a shot in the arm on Friday, usually a quiet day for business, when two peripheral issuers launched deals and one core issuer mandated. The appetite for risk was exemplified by the fact that four of this week’s six deals have priced through their sovereign.

    • 11 Jan 2013
  • Bankinter prices 20bp through its own curve

    Bankinter took advantage of robust demand for higher yielding Spanish bank debt and, following the huge success of Caixa­bank’s three year senior deal, launched a 3.5 year Cédulas on Thursday. The search for yield was in evidence as the borrower attracted a book that was more than seven times covered.

    • 11 Jan 2013
  • S&P affirms CFF leaves DexMA on Watch Negative

    The period that S&P allowed issuers to modify their covered bond programmes and meet the agency’s revised swap counterparty criteria came to an end on January 11. Many of the eight programmes that S&P identified, including CFF, have now been affirmed though some, such as DexMA, remain in Watch Negative and others have been downgraded.

    • 11 Jan 2013
  • Nordea covered bond success ‘never in doubt’

    Finland’s Nordea Bank this week priced a €1.25bn covered bond flat to its own curve on the back of a comfortably oversubscribed book. Given the strength and rarity of the credit and jurisdiction, a positive result was never in doubt, lead managers told EuroWeek.

    • 11 Jan 2013
  • Basel LCR changes confuse market with lower rated covered treatment

    The Basel Committee for Banking Supervision’s decision to expand the range of assets banks can hold in their liquidity coverage ratio (LCR) has split the covered bond market over what will happen to bonds rated lower than AA-.

    • 11 Jan 2013
  • UniCredit inspires Italians with biggest ever OBG book

    UniCredit put on a demonstration of new year risk appetite on Monday when it collected the biggest ever order book for an Italian covered bond. The national champion priced its €1bn seven year from €6.5bn of orders, throwing the door open for second tier Italian names, which bankers are urging to take advantage of the strong market.

    • 11 Jan 2013
  • CBA goes global, sells dollar deal to Europe

    Commonwealth Bank of Australia has demonstrated how globalised the covered bond market has become by selling almost half of the year’s first dollar covered bond benchmark to European buyers.

    • 11 Jan 2013
  • AyT multi cédulas buybacks now possible

    Buybacks of multi cédulas, which covered bond bankers had previously thought impossible, could now be on the cards. Ahorro Corporacion Financiera (ACF) told The Cover on Thursday that a partial amortisation of the AyT multi cédulas deals that it arranged could happen, after a positive signal from the Spanish regulator and affirmation from the rating agencies.

    • 10 Jan 2013
  • Bankinter prices 20bp through its own curve

    Bankinter has taken advantage of robust demand for higher yielding Spanish bank debt and, following the huge success of Caixabank’s three year senior deal, it launched a 3.5 year Cédulas on Thursday. The search for yield was strongly in evidence and, in little over an hour, the borrower attracted a book that was more than seven times covered, allowing it to fix the spread 25bp inside initial price thoughts.

    • 10 Jan 2013
  • CBA goes global, selling dollar deal to Europe

    Commonwealth Bank of Australia has demonstrated how globalised the covered bond market has become by selling almost half of the year’s first dollar covered bond benchmark to European buyers. CBA issued its deal, Australia’s first covered bond of 2013, on Wednesday. The $2bn 0.75% January 2016 was priced at the tight end of guidance at 32bp over mid-swaps and 44bp over US Treasuries through joint leads Barclays, CBA and RBC Capital Markets.

    • 10 Jan 2013
  • CBA to kick off strong year for Australian covered bonds

    Commonwealth Bank of Australia is ready to launch the first Australian covered bond of the year, after mandating banks for a benchmark US dollar deal that an official close to the deal told The Cover was likely to come on Wednesday. The Australian covered market is set to be the fastest growing this year, with Fitch predicting up to $37bn of supply.

    • 09 Jan 2013
  • Credit Suisse merges DCM and derivatives

    Credit Suisse is merging its debt capital markets group and its corporate debt derivatives group into a single unit, in a move to harmonise client coverage between the two business areas.

    • 09 Jan 2013
  • NIBC ponders pass through

    The worlds of securitisation and covered bonds are colliding as issuers and investors wrestle with rating volatility. After Commerzbank announced its groundbreaking SME structured covered bond, which relies on a pass through structure traditionally used in securitisations, NIBC is looking at a new covered bond programme that would also feature a pass through structure.

    • 09 Jan 2013
  • LCR rules create covered divide

    The rules governing lower rated covered bonds in Basel’s new liquidity coverage ratio are unclear and have prompted three completely different interpretations from market analysts this week.

    • 08 Jan 2013
  • Nordea success ‘never in doubt’

    Finland’s Nordea Bank is expected to price a €1.25bn covered bond flat to its own curve on the back of a comfortably oversubscribed book. Given the strength and rarity of the credit and jurisdiction, a positive result was never in doubt, lead managers told The Cover

    • 08 Jan 2013
  • Italians take inspiration from UniCredit

    Italian banks are set to issue covered bonds in the wake of UniCredit’s inspirational deal on Monday, after it attracted the largest book yet for an Italian covered bond. However, bankers are divided over whether tier two banks will move before the country’s elections on February 24, or wait until April.

    • 08 Jan 2013
  • LCR revisions welcomed but sovereign bias still a concern

    Banking industry professionals have welcome the Basel Committee for Banking Supervision’s decision to expand the range of assets banks can hold in their liquidity coverage ratio (LCR) buffer, as well as the delayed implementation date. However, some market participants are concerned that the buffer’s focus on government debt does little to break the negative feedback loop between banks and sovereigns.

    • 07 Jan 2013
  • UniCredit collects €6.5bn book as investors look south

    UniCredit put on a demonstration of the New Year’s appetite for risk on Monday morning when it priced a €1bn seven year covered bond from a €6.5bn book. Demand for the deal has been granular with the pricing, at 150bp over mid-swaps, being 90bp through the government curve.

    • 07 Jan 2013
  • Commerz mandates for first structured SME deal

    Commerzbank has mandated leads for Europe’s first ever SME structured covered bond. Meanwhile, the success of UniCredit’s seven year on Monday, could spur deals from German, Nordic and possibly Spanish issuers, bankers told The Cover. However, secondary market activity has slowed after a brisk start last week.

    • 07 Jan 2013
  • CFF on shaky ground as DexMA looks to brighter future

    Two French covered bond issuers have very different outlooks for 2013, with Dexia Municipal Agency on an upward path, while Compagnie de Financement Foncier (CFF), until recently by far the better credit, faces severe disruptions because of ratings uncertainty. Traders believe the spread differential for the two issuers is likely to converge this year and may even cross over.

    • 04 Jan 2013
  • CRH mandates but doubts grow over volumes

    Caisse de Refinancement de L’Habitat (CRH) has mandated leads for the first covered bond deal of 2013, a 12 year benchmark. But despite record covered bond redemptions this month which should theoretically be positive for supply, bankers are not getting too excited.

    • 04 Jan 2013
  • CRH reopens covered and prices close to OATs

    Caisse de Refinancement de l'Habitat (CRH) on Friday priced the first covered bond of the year and despite very tight pricing to the OAT it managed to attract high demand, particularly from Germany. Scarcity of supply was always going to be a help, but a 25bp rise in Bund yields in the last few days also played a part.

    • 04 Jan 2013
  • ECBC Label effective?

    The ECBC’s new Label initiative became effective on January 1. It sets out minimum standards for transparency. However those standards fall short of investors’ requirements and Canada has already set the bar higher. The Label’s definition of a covered bond also excludes bonds that are likely to be less vulnerable to ratings volatility.

    • 03 Jan 2013
  • CRH mandates

    Caisse de Refinancement de L'Habitat (CRH) has mandated leads for the first covered bond deal of 2013, a 12 year benchmark.

    • 03 Jan 2013
  • CFF S&P AAA doubted as DexMA fortunes improve

    Two French covered bond issuers have very different outlooks for 2013, with Dexia Municipal Agency on an upward path, while Compagnie de Financement Foncier (CFF) faces rating uncertainty, which it hopes to resolve soon. Traders believe the spread differential for the two issuers is likely to converge this year and may even cross over.

    • 02 Jan 2013