Covered Bonds - All Articles

  • Covered bonds to stay immune from viral scares

    January's total primary covered bond volume was the second highest since 2014, albeit 25% down on last year in euros. February is typically a much slower month, but supply could keep pace if issuers look to the asset class for execution certainty amid mounting concern around the potential impact of a new coronavirus in China.

    • 31 Jan 2020
  • Lloyds and NAB sell into soaring Sonia mart

    Lloyds Bank and National Australia Bank issued two very well received Sonia linked sterling covered bonds this week, taking advantage of demand spotted in a deal issued by Royal Bank of Canada last week.

    • 30 Jan 2020
  • CRH and SG hit the stars in covereds

    Caisse de Refinancement de l’Habitat (CRH) managed to attract demand of more than €6bn for a two part eight and 15 year transactions issue on Tuesday, while Société Générale subsequently issued a €1bn 10 year green covered bond flat to its curve with demand of €3bn.

    • 30 Jan 2020
  • Covered bonds 'on fire' as KHFC enjoys great execution

    Korean Housing Finance Corporation (KHFC) issued its first €1bn-sized covered bond and first negative yielding Asian covered bond on Wednesday. The strong reception was in keeping with two German Pfandbriefe also issued this week by Deutsche Apotheker- und Ärztebank (Dapo) and Sparkasse Pforzheim Calw.

    • 30 Jan 2020
  • RMBS returns as competitive funding source for UK banks

    Nationwide priced a three year UK RMBS this week at 47bp, just 10bp back of a recent three year covered bond from Lloyds. It’s the closest the two products have been in years, and potentially a tight enough spread for UK clearing banks to once again bridge the gap and revive securitization as a major source of funding.

    • 30 Jan 2020
  • Dapo makes bow with tightest Pfandbrief

    Deutsche Apotheker- und Aerztebank (Dapo) underlined just how strong the primary covered bond market is on Thursday by wrapping up a busy week's supply with what was arguably the tightest German deal of the year so far.

    • 30 Jan 2020
  • Covered bonds on fire as KHFC and SG enjoy extraordinary execution

    Korean Housing Finance Corporation (KHFC) issued its first €1bn-sized covered bond on Wednesday and priced the deal inside fair value. At the same time, Société Générale issued a €1bn 10 year green covered bond flat to its curve with eye-catching demand.

    • 29 Jan 2020
  • Plunging yields are bad news for covered bonds — make no mistake

    Demand for covered bonds has surged higher in recent weeks, even though yields in the asset class have plunged lower. But issuers should not get too excited, as the balance of power is sure to tilt back in the favour of investors if yields carry on falling.

    • 28 Jan 2020
  • CRH enjoys stellar reception in covereds despite plunging yields

    Caisse de Refinancement de l’Habitat (CRH) managed to attract demand of more than €6bn for its two part eight and 15 year transactions issue on Tuesday, with the bonds pricing tighter than where BPCE recently issued similar deals and with considerably more demand — despite a 22bp plunge in yields and with consistent demand from the European Central Bank.

    • 28 Jan 2020
  • NAB prices inside CBA and with more demand for its Sonia first

    National Australia Bank attracted healthy demand for its £1bn five year Sonia-linked covered bond issued on Tuesday, pricing the deal much tighter than where Commonwealth Bank of Australia issued two weeks ago with more demand and at an equivalent cost of euro funding.

    • 28 Jan 2020
  • SG names banks for second green covered bond

    Société Générale has mandated leads for a green covered bond, the second to be issued under its Positive Impact framework. At the same time Sparkasse Pforzheim Calw is due with a sub-benchmark Pfandbrief.

    • 28 Jan 2020
  • CRH to follow BPCE with 8 and 15 year covered bonds

    Caisse de Refinancement de l’Habitat has mandated leads for eight and 15 year covered bonds, the same maturities that BPCE chose earlier this month with great success. The two deals will be eagerly watched for size of the European Central Bank's order.

    • 27 Jan 2020
  • Lloyds tracks RBC into soaring Sonia mart

    Lloyds Bank returned to the sterling covered bond market on Monday with its first deal of 2020. It capitalised on the scarcity of short-dated Sonia supply with the first three year bond from a UK issuer in six months, which helped it to price its deal marginally inside fair value.

    • 27 Jan 2020
  • Supply drought to keep covered spreads tight

    Covered bond spreads are likely to remain well supported next week, with supply set to be thin on the ground. Though spreads are at their all-time tightest levels, market watchers will be closely monitoring the European Central Bank to see whether it lowers its order size in the primary market.

    • 24 Jan 2020
  • RBC issues tightest and largest Sonia deal ever

    Royal Bank of Canada’s £1.25bn five year covered bond issued at 47bp over Sonia on Thursday was the tightest and largest transaction to reference the rate ever issued by a bank from outside the UK. The depth of demand illustrated that the bid for Sonia products has grown.

    • 23 Jan 2020
  • Norway first to align with covered directive

    The Financial Supervisory Authority of Norway (FSA) has become the first regulator to recommend a series of proposed amendments that would align its covered bond regime with the EU covered bond directive. EU member states have until July 2021 to implement the directive, and while it seems likely that Spain has the most work to do, other countries — such as Italy, France and those in Scandinavia — will also be obliged to consider important revisions.

    • 22 Jan 2020
  • How would UK capital markets handle a BoE rate hike?

    A Bank of England rate hike is in no one's short term thinking. But if it happened, it could be dire for the housing market and therefore, for those parts of the capital markets that exist because of it.

    • 21 Jan 2020
  • Covereds in good shape as cut in ECB order rumoured

    Four covered bond issuers got strong receptions for their deals on Tuesday amid unconfirmed rumours that the European Central Bank could be poised to lower the size of its primary market order on covered bonds launched after Tuesday.

    • 21 Jan 2020
  • DZ Hyp among four covered bonds planned for Tuesday

    DZ Hyp has announced plans to issue a €750m four year mortgage Pfandbrief which will compete for investors’ attention alongside other sub-benchmark Pfandbriefe from DekaBank and Overbank. A fourth issuer is also expected to announce a benchmark covered bond in euros, with execution likely before lunchtime on Tuesday.

    • 20 Jan 2020
  • NordLB's renewable debut draws demand

    NordLB Luxembourg attracted exceptionally strong demand for its inaugural renewable energy covered bond on Monday — the first ever to be issued under the country’s new legal framework. This was despite the deal being sub-benchmark size and not eligible for the European Central Bank’s covered bond purchase programme.

    • 20 Jan 2020
  • Covered bond squeeze feared as ECB ramps up buying amid slower supply

    After a brisk start to the year, the pace of covered bond supply had already begun to slow by Thursday amid growing concern that the European Central Bank would be compelled to step up purchases, igniting fears of a technical squeeze. Bill Thornhill reports.

    • 16 Jan 2020
  • Covered bond issuers price flat to fair value

    A lack of supply relative to 2019 and much more aggressive central bank buying ensured that Banco Sabadell, Royal Bank of Canada and OP Mortgage Bank were able to price covered bonds flat to fair value this week.

    • 16 Jan 2020
  • French threesome covers up

    BPCE, Credit Mutuel Home loan (CM-CIC) and Axa Bank issued French covered bonds this week with Axa issuing its first transaction under a new and lower rated Belgian ownership structure.

    • 16 Jan 2020
  • Trio of Austrians find Pfandbrief favour

    Austrian covered bond borrowers Bawag PSK, UniCredit Bank Austria and RLB Oberösterreich found a warm reception for their €500m no-grow deals this week.

    • 16 Jan 2020
  • Pfandbriefe trio price flat to their curves

    Helaba, Deutsche Bank and Deutsche Pfandbriefbank (PBB) had little trouble accessing the Pfandbrief market this week with a series of deals that were priced flat to their curves.

    • 16 Jan 2020
  • Luminor Bank steps closer to covered bond issuance with Moody’s rating

    An Estonian covered bond could soon be due in the market after Moody’s rated Luminor Bank’s programme this week — the first to be structured under the country’s newly established law. The rating comes after the European Central Bank granted Luminor a license to issue covered bonds in December.

    • 16 Jan 2020
  • NordLB Lux mandates for first renewable energy deal, again

    NordLB Luxembourg was expected to arrive in the market with its inaugural renewable energy covered bond late last year, having completed a market programme and mandated lead managers. On Thursday it finally plucked up the courage to re-announce the long-awaited deal — the first to be ever issued under the country’s new law.

    • 16 Jan 2020
  • Crédit Mutuel grabs €1.25bn as covered bond supply fears mount

    Credit Mutuel Home Loan SFH (CM-CIC) completed a busy week in the euro covered bond market with a €1.25bn 10 year offering on Thursday. The deal emerged amid growing concern that euro covered bond supply will fall, as borrowers like SCBC, Danske Bank and Nordea turn to local currency markets, while others see better alternative funding opportunities, or simply bide their time.

    • 16 Jan 2020
  • Investors swoop on Helaba and Bawag covered bonds as drought feared

    Landesbank Hessen-Thueringen Girozentrale (Helaba) and Bawag enjoyed heavy demand for their covered bonds, issued on Wednesday, amid growing concern that January’s usual supply surge is about to come to an abrupt end.

    • 15 Jan 2020
  • Covered bond investors putting on the risk

    Covered bond investors are increasingly confident about taking on duration and credit risk as yields are set to be stable and spreads should remain well supported, an asset manager told GlobalCapital on Wednesday.

    • 15 Jan 2020
  • Bawag and Helaba mandated amid expected supply slowdown

    Covered bond issuers Bawak PSK and Helaba have mandated leads for deals that are likely to be launched on Wednesday — signalling a slackening in Tuesday’s much faster pace.

    • 14 Jan 2020
  • Covered bond demand takes off as supply rises

    BPCE took the lion’s share demand for the six covered bonds issued on Tuesday with its stand out two-part offering that was priced flat to the curve — along with other deals from OP Mortgage Bank, Deutsche Pfandbriefbank, UniCredit Bank Austria and Axa Bank Belgium, which issued its first transaction under a new and new and lower rated ownership structure.

    • 14 Jan 2020
  • Covered bonds grapple with QE-distorted world

    Navigating the covered bond market will not be without its challenges in 2020. The Targeted Longer Term Refinancing Operation (TLTRO), European Central Bank deposit tiering and the Covered Bond Purchase Programme have collectively distorted the market, but added to this concoction is the impact of negative interest rates. Against this backdrop issuers, investors and investment bankers gathered in Munich in November to discuss the outlook for covered bonds. It is likely that new issue premiums will gradually tighten, but the path is unlikely to be smooth. January is typically the busiest month, but in 2019, issuers that funded this early paid the highest spreads. And, with the ECB expected to buy in the region of €4.5bn covered bonds a month, issuers will not feel compelled to move early. But the ECB monetary policy has unwelcome implications. Covered bonds have begun to lose value against government bonds, and this will extend if the ECB is unable to loosen restrictions on government bond purchases.

    • 14 Jan 2020
  • Eurozone covered bond issuers to feed ECB

    Four covered bond issuers from Germany, Austria, France and Belgium have announced deals that are expected to be launched on Tuesday and will be heavily bought by the European Central Bank.

    • 13 Jan 2020
  • Scarce supply helps covered bond issuers price deals flat to fair value

    A lack of supply relative to 2019 and much more aggressive central bank buying ensured that Banco Sabadell, Royal Bank of Canada, Deutsche Bank and RLB Oberösterreich were able to price their respective covered bonds flat to fair value on Monday.

    • 13 Jan 2020
  • RLB OÖ mandates for 15 year ahead of ‘crowded’ expectations

    Raiffeisenlandesbank Oberösterreich has signalled that it will issue a new 15 year covered bond in the euro market next week, with the Austrian bank keen to book its spot in an extremely crowded market.

    • 10 Jan 2020
  • Issuers flock to long ends in covered bonds

    Issuers this week have steered clear of negative yielding covered bonds, choosing longer maturities for their securities. Crédit Agricole Italia went as far as 25 years, while on the other end was Santander UK marketing a seven year tenor.

    • 09 Jan 2020
  • Banks flock to sterling in 'delayed reaction' to Brexit election

    Foreign and domestic banks flocked to the UK this week as they sought to take advantage of stellar funding conditions in the sterling market. Bankers said this was the first chance issuers had to benefit from opportunities in the currency following December’s general election, which removed a lot of short-term uncertainty around Brexit.

    • 09 Jan 2020
  • SSAs and FIG seize sizzling sterling amid Brexit bounce

    The sterling bond market, usually buoyant enough at the start of a year, got a Brexit boost this week, allowing public sector borrowers and financial institutions to take full advantage. Investors piled into deals following greater clarity on the UK’s looming exit from the EU but before possible volatility around the January 31 departure date. Burhan Khadbai and David Freitas report.

    • 09 Jan 2020
  • Crédit Agricole Italia's dual tranche offers more juice with longer tenor

    Crédit Agricole Italia marketed a dual-tranche bond with eight year and 25 year maturities. A steeper curve helped the longer tranche offer a higher pickup against the shorter bond, but investors still placed hefty orders on both tenors.

    • 09 Jan 2020
  • Issuers flock to long end in euro covereds

    Danske Mortgage Bank, Santander UK, Raiffeisenlandesbank Hypothekenpfandbrief and UniCredit Bank AG were marketing covered bonds on Wednesday, steering well clear of negative yields by tapping into healthy demand for long dated assets.

    • 08 Jan 2020
  • Issuers turn to Sonia for sterling covered

    The Sonia-linked covered bond market is showing signs that it is 'maturing', with Commonwealth Bank of Australia launching a new deal in the format on Tuesday and Coventry Building Society looking to follow in the footsteps of two of its compatriots early in 2020.

    • 07 Jan 2020
  • Covered bond issuers flood back into euros with 'cautious' NIPs

    Issuers rushed to open the euro covered bond market this week. Trades from ABN Amro, Erste Group and LBBW showed that investors are ready to put cash to work, but higher new issue premiums suggested that issuers were taking a 'conservative' approach at the beginning of the year.

    • 07 Jan 2020
  • Leeds benefits from ‘unparallelled’ demand for sterling covered bond

    Leeds Building Society opened books on Monday for its second Sonia-linked covered bond. The trade benefited from an ‘unparallelled’ level of demand, reaching almost four times its £600m size.

    • 06 Jan 2020
  • LBBW set to be first of FIG in 2020

    LBBW has picked banks to arrange the sale of a new euro covered bond as activity in the market gets off to a slower start than usual following the new year break.

    • 06 Jan 2020
  • Nationwide ‘extracts maximum value’ with tightest five year Sonia covered to date

    Nationwide Building Society issued the first sterling covered bond of the year on Friday, without needing to pay any premium over the tight trading levels of its existing bonds.

    • 03 Jan 2020
  • Euro FIG market set for ‘slower start than normal’

    Financial institutions could take longer than usual to return to the euro bond market at the start of 2020, with the early issuance window having been broken up by the holiday period.

    • 02 Jan 2020