Covered Bonds - All Articles

  • Secured deals shine as volatility kicks credit

    The covered bond and ABS markets came into their own this week as soaring volatility, driven by Italy's wrangling over picking a government, effectively shuttered other credit markets, write Asad Ali and Bill Thornhill.

    • 31 May 2018
  • TD ‘owns’ covered bonds after issuing record sterling deal

    Toronto Dominion Bank issued the only two covered bond benchmarks in what was otherwise a desolate week for the FIG sector. Despite exceptionally volatile market conditions, the euro and sterling transactions went well leading a syndicate banker to conclude that TD "owns" the covered bond market.

    • 31 May 2018
  • TD sets new record with largest sterling covered bond

    Toronto Dominion Bank issued the largest sterling covered bond from a non-UK bank on Thursday. The transaction, which follows the issuer's successful euro covered bond on Wednesday and comes amid a dearth of FIG issuance, demonstrates the strength of the product and TD’s name.

    • 31 May 2018
  • TD takes €1bn in covered bonds as volatility lets up

    Toronto Dominion took advantage of a brief respite from volatility in the European government bond market to issue a €1bn seven year transaction on Wednesday.

    • 30 May 2018
  • DNB to issue green covered bonds

    DNB is preparing to issue its first green covered bond, the proceeds of which will be used to fund the most energy efficient residential mortgages in Norway. The prospective deal has been structured in line with the Green Bond Principles and will be endorsed by Sustainalytics.

    • 30 May 2018
  • TD mandates as rates volatility spooks markets

    In the face of rates volatility Toronto Dominion has decided against an intraday deal execution and has instead mandated for a covered bond that should be launched on Wednesday.

    • 29 May 2018
  • Oberbank’s debut Pfandbrief finds strong demand

    Oberbank was comfortably subscribed on Tuesday for its debut covered bond, which was priced in line with a recent French benchmark despite being only €300m in size, having a tricky 15 year tenor and arriving amid increasing volatility in credit markets.

    • 29 May 2018
  • EBA pushes ESNs closer to the light of day

    The European Banking Authority will soon publish outline proposals setting out the case for European secured notes (ESNs), which according to Moody’s may not necessarily be any riskier than traditional covered bonds.

    • 25 May 2018
  • Seven year near saturation in covered bonds

    The seven year area of the covered bond market is in danger of becoming over-supplied after a series of deals around that tenor this week. But with the pace of supply expected to slow and technical conditions still positive the overall health of the market still seems good.

    • 24 May 2018
  • Five years the new covered bond sweet spot

    Five year covered bonds issued this week from a trio of issuers got the best executions with the most generously priced Canadian deal from the Fédération des caisses Desjardins du Québec (CCDJ) earning the most praise.

    • 24 May 2018
  • Duration plays critical role in busy covered bond market

    The covered bond market enjoyed one of its most active weeks this year, with as many as eight transactions launched, even as other markets struggled. However, while most issues were well received, the two longest dated deals dragged and showed investor concerns over duration.

    • 24 May 2018
  • OP raises €1bn in saturated seven year covered bond

    OP Mortgage Bank raised €1bn of seven year funding in the covered bond market on Thursday and paid only 1bp more than Nordea’s recent seven year. However, with a €1.2bn order book, it was the least subscribed Finnish covered bond of the year suggesting the tenor has lost some appeal.

    • 24 May 2018
  • Medium tenors favoured in busy covered bond market

    Covered bond deals issued in the five to seven year part of the curve on Wednesday by ING Belgium, Berlin Hyp (BHH) and The Fédération des caisses Desjardins du Québec (FCDQ) were all well received and stood in stark contrast to a 10 year from Nationwide.

    • 23 May 2018
  • Aktia enjoys strong comeback after three year hiatus

    Aktia Bank attracted strong demand for its tightly priced covered bond on Tuesday, the issuer’s first since March 2015, and the first from its restructured mortgage business.

    • 22 May 2018
  • Belgian, German and Canadian issuers to join wave of covered bond supply

    ING Belgium has mandated leads for its first covered bond deal since September 2015 and, after being 150 years in operation, Berlin Hyp has announced plans for a ‘jubilee’ transaction in the form of a mortgage backed five year.

    • 22 May 2018
  • Covered bond primary market takes off

    The covered bond primary market picked up sharply on Tuesday, with three core European issuers launching deals across a range of tenors, while another announced a mandate.

    • 22 May 2018
  • Duration tops spread for 'biggest role' to play in covered bonds

    The widening spread impact of lower European Central Bank covered bond purchases has been a key focal point for the market for most of this year but, given much greater rates volatility, duration has a more important role to play, according to one major covered bond investor.

    • 21 May 2018
  • Friday’s Pfandbrief pricing shows issuers are cautious

    Commerzbank’s decision to issue a Pfandbrief on the last day of the week strongly implies that supply is going to get much brisker over the next, holiday-shortened week. Its decision paid off, but it clearly questions the longevity of enthusiastic covered bond demand.

    • 18 May 2018
  • Landshyp finds tighter green covered pricing

    Landshypotek Bank was able to close the price gap to its larger Swedish peers on Wednesday when it issued its first green covered bond.

    • 17 May 2018
  • Nordea enjoys best covered demand of 2018

    Nordea issued a €1bn seven year bond on Thursday and attracted the highest subscription ratio of any euro covered bond of this size in 2018, while pricing with a tiny new issue premium. The execution offers further evidence that covered bonds are on a solid footing, in contrast with other sectors.

    • 17 May 2018
  • Pfandbrief issuers could look away from euros

    Deutsche Pfandbriefbank (PBB), which completed its second euro benchmark Pfandbrief of the year this week, is expected to consider issuance in dollars or sterling, as are other German issuers that have big foreign currency assets.

    • 16 May 2018
  • All-inclusive covered bond directive upholds status quo

    If the principles-based European covered bond directive is implemented in its current draft form not a lot will change — but that may be just as well.

    • 15 May 2018
  • PBB pays tiny Pfandbrief NIP as rate hike fears stoked

    Deutsche Pfandbriefbank (PBB) priced an Aa1 rated six year Pfandbrief on Tuesday at the same spread as Deutsche Bank’s Aaa rated five year issued last week, showing the market has improved. But, with tighter monetary policy recently signalled and more supply due, the advantageous funding window may prove short lived.

    • 15 May 2018
  • Oberbank plans to issue its first covered bond

    Austria's Oberbank has mandated leads to roadshow its first covered bond.

    • 14 May 2018
  • Pfandbrief volumes stabilises as new names emerge

    The Pfandbrief market may at last be stabilising after almost 18 years of contraction. And with the share of mortgage Pfandbriefe growing and peripheral exposure shrinking, collateral quality has improved. The market is set to evolve as new names emerge, others merge and some disappear.

    • 14 May 2018
  • Anaesthetised OBGs unfazed by Italian politics

    The Italian Obbligazioni Bancarie Garantite market has barely reacted to the growing probability that an anti-European coalition between the Five Star Movement and League parties could soon be announced. Even though OBGs are expensive relative to senior unsecured and sovereign bond markets, spreads could well hold steady unless there is a considerable improvement in supply.

    • 11 May 2018
  • LBBW's covered bond canary in the coal mine

    Pfandbrief borrowers rarely issue sterling deals of more than £250m, so when LBBW priced a £750m transaction with demand of £1.4bn this week, alarm bells were ringing. The astounding wall of money chasing the safest of safe assets may say as much about the state of the market as it does about the value of the deal itself.

    • 10 May 2018
  • Covered supply to improve as dark clouds on the horizon

    Next week will be the first and only full business week of the month. With spreads having stabilised, a broad range of issuers are expected to take advantage of the funding window, not least because of some concerns that credit conditions could deteriorate later in the year.

    • 10 May 2018
  • LBBW issues record-breaking sterling covered bond

    At £750m, the debut sterling covered bond issued by LBBW on Wednesday was by far the largest ever of its kind sold by a European bank, with the trade attracting demand that was off the scale compared with anything that had previously been issued in the currency.

    • 09 May 2018
  • Covered bond investors fret over global outlook

    Covered bond investors say that, in isolation, their market looks in good shape. The trouble is, US equities and Treasuries are looking overvalued and a sell-off there could well spark a rout in global credit markets which will invariably hit covered bonds.

    • 09 May 2018
  • Deutsche and Oberösterreich pay tiny covered bond NIPs

    Covered bond deals issued on Tuesday by Deutsche Bank and Hypo Oberösterreich offered concessions of less than 2bp, illustrating that spreads have stabilised. With supply likely to remain low over the next few weeks, the more supportive backdrop should persist.

    • 08 May 2018
  • EBA gets two month ESN reprieve

    The European Banking Authority has been granted a two month extension to complete its assessment of the case for European Secured Notes (ESNs).

    • 04 May 2018
  • Bank of China hires Skeet amid ambitious plans

    Bank of China (BoC) plans to play to its strengths by deploying its balance sheet and providing liquidity to parched investors. With syndicate and trading operations in place, it has hired Tim Skeet as head of Western European origination.

    • 03 May 2018
  • LB Steier marks new 15 year in covereds

    Raiffeisen Landesbank-Steiermark attracted strong demand for the most generously priced 15 year Eurozone covered bond of the year, and the first from an Austrian lender in this tenor. The level of excess demand suggests market conditions may have begun to improve.

    • 03 May 2018
  • RLB Steiermark, LBBW and Aktia plan covered bonds

    Raiffeisen-Landesbank Steiermark is expected to open order books on Thursday for a €500m 15 year Austrian Pfandbrief, LBBW is planning a UK roadshow with a sterling Pfandbrief in mind and Aktia Bank has announced plans for a euro covered bond roadshow.

    • 02 May 2018
  • Covered bond supply to slow, Eurosystem will turn to secondary

    April 2018 was one of the heaviest Aprils in the last decade for covered bond supply, and with the Eurosystem buying less in the primary market, offers are still easy to find. But with near term supply expected to moderate and the Eurosystem potentially becoming more active in the secondary market, bankers are hopeful that spreads will stabilise.

    • 02 May 2018
  • The secret to CRN's sustainable Cédulas success

    Caja Rural Navarra’s fruitful return to the covered bond market last week was underpinned by several important elements, not least its decision to update and improve its sustainability framework. In the context of the European Central Bank’s diminishing support, the bank’s efforts offer a salutary guide to other borrowers, who will soon be obliged to compete harder for investors’ attention.

    • 01 May 2018