Covered Bonds - All Articles

  • TSB extends with Sonia covered bond as CIBC lines up

    TSB Bank attracted good demand for its Sonia-linked covered bond on Tuesday, pushing out along the curve with a rare seven year that sufficiently differentiates from central bank liquidity. The extraordinarily strong sterling market conditions encouraged Canadian Imperial Bank of Commerce to follow Bank of Nova Scotia and mandate leads for another five year Sonia offering.

    • 12.30 PM
  • BNS issues largest Sonia covered bond as TSB mandates

    Bank of Nova Scotia (BNS) priced the first Sonia-linked Canadian covered bond in well over a year and the largest ever issued by any bank since 2014 on Monday, as TSB mandated leads to roadshow another Sonia linked covered bond.

    • 14 Jun 2021
  • Spread stability in secondary rates market ahead of EU test

    An ECB meeting on Thursday that delivered what traders had predicted meant there was little volatility in the rates market that afternoon. With a glut of supply about to come from the EU, one trader predicted spread tightening may follow the bellwether trade.

    • 11 Jun 2021
  • UK must avoid the EU’s Taxonomy gaffes

    Does the world need another taxonomy of what is green?

    • 10 Jun 2021
  • UK to be torn between harmony and leadership on green regulation

    The UK has begun the process of creating its own versions of the European Union’s sustainable finance regulations, by picking a Green Technical Advisory Group to help it draft a green taxonomy. It will face two conflicting priorities: to maximise harmonisation by staying close to EU rules; and to depart from them, for a variety of reasons including the possibility of improving on the EU’s approach.

    • 10 Jun 2021
  • First GBP update since 2018 calls for holistic disclosure

    The Green and Social Bond Principles organisation published the first new version of the Green Bond Principles since 2018 on Thursday. It strengthens the recommendations that issuers publish a bond framework and obtain an external review, and encourages issuers to communicate about their organisation-wide sustainability efforts, not just the assets linked to the labelled bond.

    • 10 Jun 2021
  • Covereds wobble as sensitivity on display

    Covered bonds issued this week by SCBC and Bank of New Zealand were thinly oversubscribed and illustrated that investors are still sensitive to price, albeit that demand was good for a small green debut from Eika Boligkreditt and a tap from Oma Savings Bank.

    • 10 Jun 2021
  • Moody’s covered bond RFC bodes well for Swiss structures

    Moody’s has published a request for comment regarding a proposed change in its rating methodology that could improve the rating stability of Swiss structured covered bonds. This could in turn give regulators another reason to consider updating the country’s legal framework.

    • 10 Jun 2021
  • Promise of ‘greenium’ pushes FIG ESG supply to record pace

    Banks have already printed more green bonds this year than they sold in the whole of 2020 and the momentum in issuance is showing no sign of slowing. Borrowers are increasingly interested in labelling subordinated debt, amid growing evidence that such products can offer even more pricing power.

    • 10 Jun 2021
  • Renewed ECB buying and supply drip to keep squeeze on covered bond spreads

    The European Central Bank bought fewer covered bonds in May than it did in any month this year so far but its portfolio still grow and may do so by even more in June. With supply still likely to be limited, this should keep prospective spread widening contained ahead of a supply glut in the sovereign, supranational and agency sector.

    • 09 Jun 2021
  • BMO follows others with covered bond Sonia conversion

    Bank of Montreal is seeking investor consent to switch from referencing Libor to Sonia on its sterling covered bond, following similar moves from other borrowers. Different calculation methods are emerging for the transition.

    • 08 Jun 2021
  • PMM: Challenging conditions advance green revolution

    Issuance seized up across most markets last week with lower rated FIG and corporate deals staying clear of the primary market as many participants struggled with a combination of low subscriptions and tight spreads. Subscriptions remain deflated but concessions fell across the board as increased selectivity led to more focus on green/sustainable labels.

    • 08 Jun 2021
  • BNZ mimics Westpac with thinly subscribed covered bond

    Bank of New Zealand (BNZ) priced an €850m seven year covered bond on Tuesday in line with the bid side of Westpac New Zealand’s deal in the same size and tenor issued last week. Although the order book was thinly subscribed, lead managers deemed the quality of orders high.

    • 08 Jun 2021
  • Eika and Oma show vital signs but covered bond recovery in doubt

    Eika Boligkreditt and Oma Savings Bank found good demand for their covered bonds sold on Tuesday with small deal sizes, environmental appeal and European Central Bank providing a boost. Even so, syndicate bankers were not convinced the market was back to full health.

    • 08 Jun 2021
  • Fast money faces short squeeze for SURE

    Fast money accounts have been selling eight and nine year European Union bonds in anticipation of supply this week. But since these buyers are not expected to get much of an allocation of the fresh bonds, traders predict a modest short squeeze.

    • 07 Jun 2021
  • Slow SCBC sends shivers through covered bonds

    Swedish Covered Bond Corporation’s (SCBC) benchmark eight year deal, syndicated on Monday, was slow to build and, even though the final spread looked fine, the process clearly showed that investors are reticent to buy deals at prevailing levels.

    • 07 Jun 2021
  • Trio of covered bond issuers line up

    Eika Boligkreditt has mandated joint leads for a 10 year and its first green covered bond under its newly established green framework. At the same time, Bank of New Zealand plans a seven year benchmark and Finland's Oma Savings Bank intends to tap its outstanding six year deal.

    • 07 Jun 2021
  • Investors push back as bank funding finds floor

    Banks are asking whether funding conditions have reached a peak, as investors find more reason to balk at tight bond valuations. Deal arrangers argue markets will hold together, but the future could still hold higher new issue premiums and a more careful approach when it comes to trade selection.

    • 03 Jun 2021
  • Rates traders see better buying, but long end questioned

    The sovereign, supra and agency sector has seen better buying interest over the past week, but the long end continues to look more vulnerable ahead of the European Central Bank meeting and expected supply.

    • 03 Jun 2021
  • Aegon’s Cevaal accepts the new covered bond reality

    Aegon’s head of capital market solutions, Lein Pieter Cevaal, speaks to GlobalCapital about the bank’s recent experience with its debut 15 year soft bullet covered bond, a maturity that worked well for the borrower despite awkward market conditions.

    • 03 Jun 2021
  • Buyers return in covered bonds ahead of ECB meet

    The primary market for covered bond issuance is expected to improve in the five to 10 year part of the curve in the run up to next week’s European Central Bank meeting. Although Aegon Bank showed that the ultra-long long end is open, a more guarded approach is warranted, said bankers on Thursday.

    • 03 Jun 2021
  • Aegon bides its time with inaugural soft bullet

    Aegon Bank paid special attention to timing when pricing its first soft bullet covered bond, reflecting challenging market conditions, according to the bank's head of capital market solutions, Lein Pieter Cevaal.

    • 02 Jun 2021
  • Where rates go, credit may follow

    The skittish state of investor demand that was recently on display in covered bonds may herald a reassessment of credit, particularly as spreads are back to pre-pandemic levels and seemingly have limited potential for further performance.

    • 01 Jun 2021
  • PMM: Issuers go long amid inflation fear

    As inflation fears spread through the bond market, demand has fallen, particularly at the long end of the curve. However, the SSA market defied this trend last week with borrowers seeking duration, with the average maturity of a deal around 13 years. Similarly, the corporate market stretched its averaged maturity to 12 years, from just 7.4 years the week before.

    • 01 Jun 2021
  • BMO achieves solid covered bond response

    Bank of Montreal attracted good demand for a €1.25bn eight year covered bond on Tuesday and paid a modest new issue concession. The outcome was deemed a fine result given that market conditions are not at their best.

    • 01 Jun 2021
  • Aegon Bank to test ultra-long end with debut soft bullet bond

    Aegon Bank has mandated leads for its first soft bullet covered bond with a deal in the ultra-long end, where demand has proved tricky more lately. Unlike Aegon’s previous conditional pass through (CPT) issuance, this transaction is eligible for the ECB's Covered Bond Purchase Programme.

    • 01 Jun 2021