Covered Bonds - All Articles

  • Santander issues first Brazilian covered bond

    Santander Brasil has tested the country’s Letra Imobiliária Garantida (LIGs) covered bond regime with two privately placed deals.

    • 30 Nov 2018
  • Nykredit's covered shows ECB's lighter hand

    Nykredit returned to the euro covered bond market on Thursday to issue its second floating rate transaction. The oversubscription rate was similar to other recent deals, but well below that for its debut deal, when market conditions were much stronger.

    • 29 Nov 2018
  • Chinese banks looking at Lux green covered bonds

    Chinese and French banks may take advantage of a new Luxembourg green covered bond law, where the cover assets are linked to renewable energy, according to an official at the Luxembourg Stock Exchange (LuxSE).

    • 29 Nov 2018
  • Don't soil our covered bonds, warn speakers

    As the EU Covered Bonds Directive nears the finish line, speakers at the Covered Bonds Market conference held by the Association for Financial Markets in Europe (Afme) and the Association of German Pfandbrief Banks (VDP) have voiced concern about the quality of the product being diluted.

    • 29 Nov 2018
  • Aareal issues widest Pfandbrief since 2014

    Aareal Bank this week returned to the euro Pfandbrief market for the fourth time this year to issue a four year deal, which was priced at its widest spread in four years. The fact Aareal chose to pre-fund suggests that spreads may have further to go.

    • 27 Nov 2018
  • NAB finds certainty in dollars, Westpac hits euros

    National Australia Bank (NAB) was looking for execution certainty when heading to the dollar market to sell a pair of senior unsecured and covered bonds on Monday. But with credit conditions improving on Tuesday, Westpac shaved a few basis points off the cost of funding compared with its peer by opting for euros in covered and senior formats.

    • 27 Nov 2018
  • Secondary conditions ‘not far from disorderly’

    The secondary market for covered bonds remains weak and, according to one trader, conditions are “not far from disorderly”. All jurisdictions and tenors are under pressure as borrowers have “no incentive to defer planned new issues”, said analysts at DZ Bank.

    • 26 Nov 2018
  • France streamlines with SFIL’s transfer to CDC

    The French government has taken further steps to rationalise its various public sector lending institutions with the transfer of a controlling stake of SFIL to Caisse des Dépôts et Consignation (CDC), a move that should theoretically help lower public spending.

    • 23 Nov 2018
  • ANZ takes size with defensive four year covered bond

    With covered bond spreads likely to go wider, ANZ’s decision to take as much size from the market as possible was logical. The short and rare four year tenor was instrumental in boosting appeal for the bond issue, but it also helped that the issuer took the trouble to engage with investors with a roadshow beforehand.

    • 22 Nov 2018
  • More TLTRO could help ECB to help Italy

    At the latest monetary policy meeting of the European Central Bank, governing council members mentioned the looming end of the targeted longer-term refinancing operations (TLTRO II). But experts reckon that the life of this cheap liquidity programme could be extended, and that it may even be used to help stem a financial crisis in Italy.

    • 22 Nov 2018
  • Covered Bond Directive faces final race to the finish

    The European Parliamentary Committee on Economic and Monetary Affairs (ECON) voted on its version of the covered bond directive on Tuesday, with the European Council yet to agree its text. But a leaked draft of the Council’s 'overall compromise text', seen by GlobalCapital, suggests the two sides are getting closer together.

    • 21 Nov 2018
  • SG follows BPCE with more covered bond pre-funding

    Société Générale followed BPCE into the covered bond market on Tuesday, also taking the opportunity to pre-fund ahead of what many market participants expect to be a busy start to 2019.

    • 20 Nov 2018
  • HSBC Canada offers value but silence speaks to absence of volume

    HSBC Canada opened books on Tuesday for its first covered bond and followed in the same three year maturity, and with the same starting spread, as DBS Bank's issue on Monday. But, after several hours, when the spread was fixed at the initial level, lead managers failed to update investors on the order book size, leading some to question how well the deal was going.

    • 20 Nov 2018
  • DBS Bank issues Asia's largest dollar covered bond

    DBS Bank attracted a strong order book for its $1.25bn three year covered bond, the largest ever issued by an Asian bank.

    • 19 Nov 2018
  • Excess demand for BPCE’s covered bond hits four year low

    BPCE returned to the covered bond market on Monday to issue a €1bn eight year deal. Although the new issue premium was modest, the slightly tricky tenor may have deterred some investors and the subscription ratio was the lowest BPCE has experienced in four years.

    • 19 Nov 2018
  • Asian issuers push out bonds in pre-holiday rush

    A flurry of Asian bond issuers have ventured out in a bid to wrap up deals ahead of the Thanksgiving holiday in the US on Thursday, even as markets remain on shaky ground.

    • 19 Nov 2018
  • Defusing TLTRO time bomb requires prudence, not hope

    From June 2019 a large chunk of debt borrowed by banks from the EU periphery under the European Central Bank’s second Targeted Longer-Term Refinancing Operations (TLTRO II) will no longer be considered stable funding. Banks should refinance that debt in the market instead of hoping for another ECB handout.

    • 15 Nov 2018
  • Brexit bedlam wrecks TSB trade, scares UK markets

    The revolt by UK politicians against the draft Brexit agreement reached by prime minister Theresa May forced TSB Bank to pull its covered bond on Thursday, with investors also selling out of positions in other UK banks. The market fallout adds a thorn to the side of other institutions from the country planning to raise financing over the coming weeks, but it may not be enough to completely shut down markets, write Bill Thornhill, Jasper Cox, Tyler Davies, Sam Kerr and Nigel Owen.

    • 15 Nov 2018
  • Liberbank’s debut Cédulas shows way out of TLTRO II

    Liberbank plans to issue its first covered bond, a transaction that will help refinance maturing debt borrowed under the European Central Bank's second Targeted Longer-Term Refinancing Operations (TLTRO). Many other banks face a similar problem, but seem to be ignoring the €399bn maturity wall that is fast approaching, writes Bill Thornhill.

    • 15 Nov 2018
  • Danske shuns headline risk with heavily oversubscribed covered bond

    A five year covered bond issued by Danske Bank’s Finnish subsidiary on Thursday was the most oversubscribed triple A rated covered bond issued since late August and suggested that recent negative headline risk had barely affected sentiment in euros.

    • 15 Nov 2018
  • TSB pulls covered bond as Brexit volatility weighs in

    Despite offering an attractive premium, TSB Bank was unable to garner enough interest for its five year sterling covered bond on Thursday, forcing it to postpone the deal. The decision followed a high level UK government resignation that caused considerable market volatility in the UK banking sector.

    • 15 Nov 2018
  • Trio of covered bond borrowers plan deals

    Liberbank plans to issue its first covered bond, Danske Bank in Finland is set to issue its first deal in three years and UniCredit Austria has announced a roadshow hot on the heels of a Pfandbrief issued by the German subsidiary.

    • 14 Nov 2018
  • HSBC Canada set to issue debut covered bond

    HSBC Canada has mandated joint leads for its first covered bond and held investor meetings on Tuesday. The moves comes after a succession of successful dollar benchmarks from European and Canadian borrowers.

    • 14 Nov 2018
  • PBB hits LCR target with $600m Pfandbrief

    A Deutsche Pfandbriefbank three year Reg S dollar benchmark may have been meagrely oversubscribed on Tuesday but, at $600m, it was just large enough to make it over the size threshold required to meet the top liquidity coverage ratio category — to the benefit of certain investors.

    • 13 Nov 2018
  • UniCredit AG does well to raise €750m Pfandbrief

    UniCredit’s German subsidiary, HVB, did well to issue a €750m seven year Pfandbrief on Tuesday, but with Italian headline risk flaring up again, it may have paid slightly over the odds.

    • 13 Nov 2018
  • HVB and PBB to hit euro and dollar Pfandbriefe

    UniCredit’s German subsidiary, HVB, has announced plans to issue a seven year euro benchmark Pfandbrief, its first covered bond in over a year. At the same time Deutsche Pfandbriefbank (PBB) plans to issue a dollar benchmark three year Pfandbrief.

    • 12 Nov 2018
  • Covered spreads to stabilise from Q2 2019

    A comparison of the redemption schedule for core European covered bonds versus redemptions from the European Central Bank’s asset purchase programme suggests that spreads in the asset class will start to stabilise in May 2019, after suffering a period of widening.

    • 12 Nov 2018
  • YBS matches Coventry as Sonia hopes stay strong

    Yorkshire Building Society (YBS) broadened its investor base on Friday with its first sterling covered bond in six years. The deal was set to price in line with a similar five year Sonia-linked bond issued this week by Coventry Building Society but with less demand. Even so, supply hopes remain alive.

    • 09 Nov 2018
  • DBS to hit dollar covered bonds after three year hiatus

    DBS Bank is planning a roadshow ahead of its first dollar covered bond in over three years, and the first from a Singaporean bank since February 2017. The expected deal follows two large Canadian benchmarks and shows that dollar covered bond funding is becoming more compelling than euros.

    • 09 Nov 2018
  • Demand for ESNs likely, but supply in doubt

    A feasibility study on prospective issuance of European Secured Notes (ESN) — a dual recourse structure that works like a covered bond — suggests good potential for demand but limited scope for supply. Even so, setting up a legislative framework is probably a good idea as circumstances may change, the study has concluded.

    • 08 Nov 2018
  • DNB pre-funds with covered bonds in size

    DNB Boligkreditt took the opportunity on Wednesday to pre-fund as the start of next year is expected to be volatile. The DNB Bank subsiduary issued one of the largest five year covered bonds of 2018. Despite its large size, the deal was priced with a tight new issue concession.

    • 07 Nov 2018
  • Bank of Nova Scotia serves up rare offering to Swiss market

    Bank of Nova Scotia (BNS) offered Swiss investors a rare chance to buy its debt with a seven year covered bond from a rare name on Tuesday.

    • 07 Nov 2018
  • Coventry issues first Sonia-linked financial five year

    Coventry Building Society became the first financial institution to issue a five year Sonia-linked covered deal on Tuesday, just beating Yorkshire Building Society (YBS) to the punch.

    • 06 Nov 2018
  • DZ Hyp issues first Pfandbrief under new brand name

    DZ Hyp this week issued its first Pfandbrief following the merger of DG Hyp and WL Bank. At €1bn, the deal was larger than most and, though it was priced much tighter than a range of non-German seven year deals, it did land at the widest level for a German bank of this rating in over two years.

    • 06 Nov 2018
  • Yorkshire, Coventry, Lloyds and DZ Hyp embark on series of covered bond firsts

    Yorkshire Building Society (YBS) and Coventry Building Society have mandated leads for the first five year Sonia-linked covered bonds, Lloyds is out with the first Reg S dollar covered bond from a UK issuer in years, and DZ Hyp has mandated leads for the first deal under its new brand name. Elsewhere, Bank of Nova Scotia has opened order books for a three year sterling tap.

    • 05 Nov 2018
  • Mixed hopes for November covered bond supply

    Covered bond spreads are likely to be wider in January when supply typically peaks, making a good argument for pre-funding this November and giving optimism to some bankers. However, while there are a few projects slated for next week, other bankers do not believe an avalanche of deals is likely.

    • 02 Nov 2018
  • Covered bonds offer SMBC a ‘new level of stability’

    Stability of foreign currency funding is a priority for Sumitomo Mitsui Banking Corporation and covered bonds provide a new level of balance in this regard, according to the bank’s head of treasury. Since other borrowers in Japan are sure to be thinking along the same lines, the market for Japan's covered bond is likely to have tremendous scope for growth.

    • 01 Nov 2018