Covered Bonds - All Articles

  • Kookmin gets solid return result

    Kookmin Bank issued a $500m five year on Thursday, attracting a comfortably oversubscribed and well distributed book for its second legislative deal, which was priced at the same spread as the issuer’s first, despite a challenging market environment.

    • 29 Jan 2016
  • Covered bond harmonisation should be ‘ambitious’ says ECB

    The European Central Bank has said efforts to raise minimum standards in the covered bond market should be ambitious, and it sees considerable benefits in harmonisation. The ECB was responding the European Commission’s proposals for harmonisation of the covered bond market.

    • 29 Jan 2016
  • Principality draws £475m with Friary

    Principality Building Society priced its Friary No.3 prime UK RMBS deal, landing £475m in what one banker called a ‘tricky’ market. As with sterling covered bonds, the RMBS primary market also seems to be pricing at successively wider levels.

    • 29 Jan 2016
  • Kookmin replicates $500m covered bond success

    South Korea’s Kookmin Bank issued its second ever covered bond this week, raising $500m from a five year note that was more or less a replica of its debut transaction.

    • 29 Jan 2016
  • UKAR tenders for B&B’s covered bonds

    UK Asset Resolution, the UK government’s holding company that has owned the mortgage book of Bradford and Bingley (B&B) since its nationalisation in September 2008, has announced a tender offer and early redemption of the issuer’s covered bonds.

    • 28 Jan 2016
  • AIB and WL enjoy strong receptions

    AIB Mortgage Bank attracted robust demand for its €1bn seven year covered bond issued on Thursday, and WL Bank also did well despite the difficult 10 year tenor and measly spread.

    • 28 Jan 2016
  • CBA funds long at no extra cost as SCBC flies high with fives

    Commonwealth Bank of Australia (CBA) funded itself more cheaply with a 15 year covered bond than it did with a five year this week. It followed Swedish Covered Bond Corporation (SCBC) which issued at the same spread as earlier deals despite a market widening.

    • 28 Jan 2016
  • AIB enjoys strong reception for first Irish covered bond of 2016

    AIB Mortgage Bank attracted robust demand for its seven year covered bond, the first deal from Ireland this year. The transaction benefitted from a very attractive spread to the government curve compared with deals issued by Spanish and Italian banks, and the return of demand from asset managers.

    • 28 Jan 2016
  • Kookmin opens books

    Kookmin Bank was set to open books for its second dollar-denominated legislative covered bond on Thursday.

    • 28 Jan 2016
  • UKAR tenders for B&B’s covered bonds

    UK Asset Resolution, the UK government’s holding company that owns the mortgage book of Bradford and Bingley (B&B) following its nationalisation in September 2008, has announced a tender offer and early redemption of the issuer’s covered bonds.

    • 28 Jan 2016
  • Kookmin, HNA Group woo dollar bond investors

    South Korea’s Kookmin Bank is looking to price its second covered bond on Thursday, while HNA Group is out to tap its existing dollar notes that were issued two months ago.

    • 28 Jan 2016
  • TD issues fourth sterling deal at widest spread, but cheaper than euros

    Toronto Dominion Bank opened books for the fourth three year floating rate sterling benchmark of the year and was set to price the deal at the widest spread of the year. Kreissparkasse Koeln has announced a sub-benchmark sized eight year Pfandbrief.

    • 27 Jan 2016
  • CBA pays less for 15 year than five year funding

    Commonwealth Bank of Australia has successfully issued the first euro covered bond from an Australian bank in nearly 12 weeks. Swapped back into Australian dollars the 15 year tranche provided cheaper funding than the five year.

    • 27 Jan 2016
  • No more covered bond snobbery about pass throughs

    Established covered bond investors are often sceptical about conditional pass through deals. The structure allows the maturity of their investments to be extended, perhaps by decades. But they could be safer than long dated bullet deals.

    • 26 Jan 2016
  • No more covered bond snobbery about pass throughs

    Established covered bond investors are often sceptical about conditional pass through deals. The structure allows the maturity of their investments to be extended, perhaps by decades. But they could be safer than long dated bullet deals.

    • 26 Jan 2016
  • SCBC tightens pricing, WL does not

    Two covered bond issuers from Sweden and Germany launched euro benchmarks on Tuesday. Both transactions were healthily oversubscribed, but with a wider starting spread, Swedish Covered Bond Corporation (SCBC) was able to issue a much larger volume, and tighten pricing during the bookbuild.

    • 26 Jan 2016
  • Tighter repo rules may spur CPTs

    The European Central Bank’s extra haircuts for covered bond repo, which took effect on Monday, could spur issuers to consider using conditional pass through (CPT) structures. The higher ratings issuers can achieve using CPT structures mean lower haircuts.

    • 26 Jan 2016
  • WL Bank mandates for a 10 year, SCBC for a five year

    WL Bank mandated leads for the second €500m 10 year of 2016 from a German bank this year, and the fifth 10 year overall. Meanwhile, SCBC will follow DNB Boligkreditt with the fourth five year from a bank outside the Eurozone.

    • 25 Jan 2016
  • Kookmin lines up in dollars, others in euros

    Primary covered bond activity is expected to pick up later in the week both in euros and dollars where Kookmin is expected to issue its second legislative deal. The secondary market for covered bonds was steady, if relatively muted, on Monday.

    • 25 Jan 2016
  • French banks benefit from ECB-induced respite

    BNP Paribas and Compagnie de Financement Foncier seized the chance to issue euro benchmark covered bonds on Friday after sentiment improved overnight. But with spread widening likely to resume before long, one major investor felt the long 10 year from CFF would fare better than the tightly priced five year from BNPP, even though the CFF deal was only just subscribed.

    • 22 Jan 2016
  • The heat is on over Heta as creditors prep revolt

    A large group of investors is determined to reject a buyback offer on billions of euros in soured bonds guaranteed by the Austrian State of Carinthia — an offer that may represent the province's only chance of avoiding an unprecedented bankruptcy. Covered bonds are unaffected.

    • 22 Jan 2016
  • Storm RMBS offers attractive pricing

    The European ABS market is rolling on despite wider market volatility, with Obvion releasing what market participants have described as “attractive” price thoughts for its Storm 2016-1 Dutch RMBS deal.

    • 22 Jan 2016
  • FMS-WM tenders for Depfa covered bonds

    FMS Wertmanagement has launched two separate tender offers on the Irish Stock Exchange for euro, Swiss franc, US and Canadian dollar denominated covered bonds issued by Depfa Bank and Depfa Pfandbrief Bank SA.

    • 21 Jan 2016
  • CFF defers covered bond, blames market condition

    Compagnie de Financement Foncier had been expected to open books for a 10 year benchmark on Wednesday, but postponed the deal blaming market conditions. Rival bankers said the long tenor was the wrong choice for the weak market.

    • 21 Jan 2016
  • Crédit Agricole draws solid interest in hard market

    Crédit Agricole issued the one and only covered bond of the week on Thursday and showed that it is possible to get a strong outcome in a tough market.

    • 21 Jan 2016
  • Crédit Agricole reopens covered bonds

    Crédit Agricole issued the first covered bond of the week on Thursday and showed that it is possible to get a strong outcome despite a tough market, something which eluded Compagnie de Financement Foncier on Wednesday.

    • 21 Jan 2016
  • Two thirds switch out of covered bonds, says Fitch

    A survey of 35 investors polled by Fitch at the end of last year suggested around two-thirds are switching out of covered bonds to other asset classes.

    • 21 Jan 2016
  • Canada to consult on covered bond limit

    Canada’s Office of the Superintendent of Financial Institutions (OSFI) could allow the country’s banks to issue more covered bonds. The supervisor will begin a consultation this year which may lead to a change of the 4% limit on covered bond issuance.

    • 20 Jan 2016
  • CFF shelves only covered bond of the week

    Compagnie de Financement Foncier had been expected to open books for the first covered bond of the week on Wednesday but postponed the deal as market conditions deteriorated. Apart from the unfortunate timing, rival bankers said the long tenor was the wrong choice for the weak market.

    • 20 Jan 2016
  • FMS-WM tenders for DEPFA bonds, plans to buy more

    FMS Wertmanagement has launched two separate tender offers on the Irish Stock Exchange for euro, swiss franc, US and Canadian dollar denominated covered bonds issued by DEPFA Bank and DEPFA Pfandbrief Bank SA.

    • 19 Jan 2016
  • Italian covered bond bids hard to find

    Spreads on covered bonds from Italy’s weaker credits have shot skyward this week, with indicative bids in the worst affected names out by at least 25bp since the start of the year. The moves have followed renewed concerns over their non-performing loans.

    • 19 Jan 2016
  • CFF to test covered bond appetite

    Compagnie de Financement Fonciere is expected to open books for a euro benchmark covered bond on Wednesday, which in light of market turbulence and the long 10 year tenor, may need to offer a tempting initial concession. Market conditions permitting, another issuer could brave the market with an alternative offering.

    • 19 Jan 2016
  • Appetite for core European and non-Eurozone supply

    The supply outlook for covered bonds issued by well rated borrowers in Europe’s core and issues outside the eurozone is constructive, particularly in the defensive three to five year area, bankers told The Cover on Monday. However, with demand for peripheral supply less assured, the supply outlook for all but the very best names is set to remain challenging.

    • 18 Jan 2016
  • Kookmin return deal questioned

    South Korea’s Kookmin Bank has selected four banks to run a potential return to the covered bond market, but a source at the issuer said that due to unfavourable market conditions, there’s a possibility that the deal will not materialise.

    • 18 Jan 2016
  • Virgin RMBS attracts healthy demand, UK and Dutch deals to follow

    Virgin Money's prime UK RMBS Gosforth Funding 2016-1 was priced on Friday and attracted strong demand across all three currencies on offer. Further RMBS supply is expected from UK and Dutch issuers.

    • 18 Jan 2016
  • Decisons, decisons: Kookmin mulls covered bond return

    South Korea’s Kookmin Bank has selected four banks to run a potential return to the covered bond market, but a source at the issuer said that due to unfavourable market conditions, there’s a possibility that the deal will not materialise.

    • 18 Jan 2016
  • Investors drool over Canadian and UK covered bonds

    Covered bonds issued this week from Lloyds and Bank of Nova Scotia were among the largest seen this year and attracted the biggest order books.

    • 14 Jan 2016
  • Covered bond market busy with core supply

    Five issuers from core Europe priced covered bonds this week but the standout success, which could have been priced without the European Central Bank’s help, was the first Austrian deal of the year from Erste Bank.

    • 14 Jan 2016
  • Cédulas market reopens, but wider spreads spark concern

    A trio of Spanish issuers launched the first covered bonds of the year from southern Europe this week but, with peripheral spreads widening sharply, conditions are not conducive to further supply.

    • 14 Jan 2016
  • Covered bond issuers hold back

    The covered bond primary market was quiet on Thursday as weak credit market conditions prevailed, and with this year’s supply double the amount seen in the same period last year, indigestion has weighed on spreads. Though it is still early days, banks with this year’s largest market shares are quite distinct from those of 2015.

    • 14 Jan 2016
  • Pfandbriefe feel CBPP3’s pernicious influence

    Raiffeisen-Landesbank Steiermark and Bayerische Landesbank issued Austrian and German Pfandbrief, respectively, on Wednesday. The fact that the Austrian deal was only just oversubscribed and the German deal was placed only with domestic investors reflected the pernicious influence of the covered bond purchase programme (CBPP3).

    • 13 Jan 2016
  • Spanish encumbrance is falling but still high

    Spanish banks are becoming less reliant on the covered bond market, said Fitch, and as a consequence their balance sheets are becoming less encumbered.

    • 13 Jan 2016
  • Santander jumps Spanish queue to compete with Deutsche

    Deutsche Bank’s Spanish subsidiary launched a seven year deal on Wednesday, its second publically syndicated covered bond, but it had to compete for attention with Banco Santander, which decided to bring a new 10 year deal on the same day.

    • 13 Jan 2016
  • Investors take on risk as AT1 finds footing

    Financial institutions have taken an early plunge into additional tier one bonds this week, as European and US investors show willing to take on risk and put cash to work.

    • 13 Jan 2016
  • BNS follows BMO into euro short end

    Bank of Nova Scotia (BNS) became the third Canadian issuer to land a euro benchmark this year, launching a €1.5bn three year deal on Tuesday that quickly built momentum despite competing with three other deals for investors’ attention.

    • 12 Jan 2016
  • Bankia opens peripheral market with €1bn five year

    Bankia became the first peripheral covered bond issuer this year, offering a five year euro benchmark at a juicy premium to the Spanish sovereign.

    • 12 Jan 2016
  • Four more covered bond issuers line up with deals

    Deutsche Bank SA, Kookmin Bank, BayernLB and RLB Steiermark have mandated leads for covered bonds to be issued on Wednesday.

    • 12 Jan 2016
  • Erste re-opens Austrian covered bond mart

    Erste Bank issued the first Austrian Pfandbrief of the year, attracting a comfortably oversubscribed book and setting a strong start for issuers from the beleaguered country. At the same time, Deutsche Pfandbriefbank issued a tightly priced and larger than expected German Pfandbrief.

    • 12 Jan 2016
  • PBB and Erste line up for Tuesday

    Deutsche Pfandbriefbank and Erste bank have mandated joint leads for euro denominated covered bond benchmarks to be launched on Tuesday.

    • 11 Jan 2016
  • Lloyds trumps SG in covered bonds

    Lloyds and Société Générale both returned to the covered bond market to issue their first euro-denominated benchmarks of the year on Monday. The UK bank issued in much larger size with an order book that grew far more quickly than the book for SG’s deal.

    • 11 Jan 2016
  • Weaker secondary points to further widening

    All but one of the primary euro denominated covered bonds issued this year, whether they can be bought by the ECB or not, have widened after issue.

    • 11 Jan 2016
  • SR Boligkreditt offers up premium to DNB

    SR Boligkreditt hit the market with the second Norwegian covered bond of the week on Friday, with a five year €500m no-grow deal that offered a premium to Thursday’s successful five year deal from DNB.

    • 08 Jan 2016
  • Estonia plans covered bonds law

    The Estonian government is working on a draft law that will allow local banks to issue covered bonds, said the Ministry of Finance.

    • 08 Jan 2016
  • Dutch government to EC: narrow gap between covered bonds and ABS

    The Dutch government has urged the European Commission to address the “unbalanced” regulatory treatment of securitization compared to covered bonds, complaining of “disproportionate” incentives to invest in covered bonds versus ABS.

    • 08 Jan 2016
  • Covered bonds set for another record breaking year

    After surpassing several milestones in 2015, the covered bond market should be set for another record-breaking year in 2016. Bill Thornhill talks to Société Générale CIB’s head of covered bond origination, Ralf Grossmann, and the bank’s senior covered bond research analyst, Cristina Costa, about their predictions and recommendations for the forthcoming year.

    • 08 Jan 2016
  • Virgin Money to bring multi-currency UK prime RMBS

    Virgin Money has mandated leads for a new UK prime RMBS deal from its established Gosforth shelf, which will be issued in multiple currencies and will look to attract US investors with a 144A registration.

    • 08 Jan 2016
  • Covered bonds set up for positive new year despite ECB

    Covered bond new issue spreads are wider today than when the European Central Bank began buying for its third purchase programme a year ago. Bill Thornhill examines the causes for this anomaly and considers how the market will look in 2016.

    • 08 Jan 2016
  • Lloyds reopens sterling covered bonds

    Lloyds issued the first sterling covered bond of the year and was quickly followed by two overseas issuers who priced deals at successively wider levels.

    • 07 Jan 2016
  • Covered bonds eligible for CBPP3 struggle

    Borrowers who issued covered bonds this week that are eligible for the European Central Bank’s purchase programme (CBPP3) did not receive such a strong reception as those whose bonds were not eligible.

    • 07 Jan 2016
  • Soc Gen: Covered bonds set for another record breaking year

    After surpassing several milestones in 2015, the covered bond market should be set for another record-breaking year in 2016. Bill Thornhill talks to Société Générale CIB’s head of covered bond origination, Ralf Grossmann, and the bank’s senior covered bond research analyst, Cristina Costa, about their predictions and recommendations for the forthcoming year.

    • 07 Jan 2016
  • Non-CBBP3 eligible covered bonds see best overall demand

    Eleven covered bonds were priced in the first week of 2016 despite the onset of European holidays and US non-farm payroll data.

    • 07 Jan 2016
  • BNS funds cheaper in sterling

    Bank of Nova Scotia issued the third sterling three year floating rate note of the week, paying a slightly wider spread than Nordea and Lloyds. While this led to questions about the depth of the sterling market, bankers said the differential was justified and noted that the final funding outcome was attractive compared to alternative markets.

    • 07 Jan 2016
  • ABN takes pragmatic approach

    ABN Amro was set to price a benchmark €1.25bn 10 year euro covered bond on Thursday. The long tenor, a busy market and volatile conditions meant it was not an easy trade to sell. But with the borrower taking a pragmatic approach by paying a generous concession, the final outcome was positive.

    • 07 Jan 2016
  • La Banque Postale offers wider NIP for seven year

    La Banque Postale closed a €500m seven year covered bond on Thursday, but bankers away from the deal said the continued influence of ECB purchasing was weighing on investor demand.

    • 07 Jan 2016
  • DNB issues in size with modest concession and performs

    DNB Boligkreditt drew over €2bn of orders for its €1.5bn five year covered bond on Thursday, and despite wider volatility the new issue concession was minimal.

    • 07 Jan 2016
  • Textbook execution for BMO

    Bank of Montreal (BMO) was set to issue a €1.5bn three year covered bond on Thursday after attracting the biggest order book for a Canadian bank in euros in the past year. The borrower’s decision to opt for a short tenor proved the perfect choice in the context of Thursday’s prevailing risk averse and volatile market.

    • 07 Jan 2016
  • Nordea follows Lloyds in sterling as BMO and DNB line up in euros

    Nordea Eiendomskreditt issued the second sterling three year floating rate covered bond of the year on Wednesday following the earlier success of Lloyds which reopened the market on Tuesday. And after a strong reception for Toronto Dominion’s (TD) euro five year benchmark, Bank of Montreal and DNB Boligkreditt mandated leads for euro denominated transactions to be priced on Thursday.

    • 06 Jan 2016
  • Caffil dual trancher barely subscribed

    Caisse Francaise De Financement Local (CAFFIL) raised €1.5bn in the covered bond market on Tuesday with a two tranche public sector-backed deal. The higher yielding €500m 15 year tranche was subscribed, but the €1bn six year was not.

    • 05 Jan 2016
  • LBBW’s Pfandbrief enjoys strong demand

    Landesbank Baden-Württemberg (LBBW) priced a well oversubscribed €750m four year Pfandbrief on Tuesday, paying a minimal new issue concession.

    • 05 Jan 2016
  • Harmonisation can benefit covered bonds, says Fitch

    Fitch has published a detailed response to the European Commission’s (EC) consultation on harmonisation of the covered bond market, outlining areas that could provide a material rating benefit in some countries, but adding that a degree of market fragmentation is inherent in the covered bond market.

    • 05 Jan 2016
  • TD draws €1bn, tightens pricing

    The Toronto-Dominion Bank priced a €1bn five year covered bond on Tuesday, with the issuer able to tighten pricing from initial price thoughts on the back of strong demand for the non-ECB eligible paper.

    • 05 Jan 2016
  • Lloyds out of the blocks with three year sterling floater

    Lloyds opened the sterling covered bond market on Tuesday with a three year floating rate bond. The deal encouraged another issuer to look to tap the market with the same instrument.

    • 05 Jan 2016
  • Covered bonds to get busy next week

    LBBW mandated leads for a euro Pfandbrief, and Lloyds mandated for a sterling benchmark on Monday, while another issuer could emerge at short notice. But the primary covered bond market is not expected to pick up properly until next week as a European holiday on Wednesday and US Non-Farm Payrolls on Friday mean the only potential funding window this week is on Tuesday.

    • 04 Jan 2016
  • Senior FIG banker leaves Natixis

    The global head of debt capital markets for financial institutions and public sector issuers at Natixis has left the bank.

    • 04 Jan 2016
  • FIG and SSA DCM head leaves Natixis

    The global head of debt capital markets for financial institutions and public sector issuers at Natixis has left the bank.

    • 04 Jan 2016