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Contrasting investor receptions in euro and sterling markets but new issue premiums rise in both
Bankers predict steady flow of covered bonds issuance over coming weeks despite recent spike in activity
The conditions are in place for the return of big-ticket M&A to create a European banking champion that is sorely needed — provided the politics of it don’t get in the way
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Observers blame slower bookbuilding on deal-specific factors but others see warning shots for whole market
Covered market provides 'the deepest pocket of demand' among FIG asset classes
Capital deals and a tight Nordic senior print point to what lies ahead for issuers
The single currency stands out as the most attractive funding source while the US dollar market remains open in size
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Covered bond spreads are unlikely to widen much say dealers, plenty of whom are long inventory, especially in recently issued deals. Deals that are ineligible for central bank buying programmes, however, are vulnerable. -
Münchener Hypothekenbank (MuHyp) issued a €500m 20 year flat to fair value on Tuesday even though market conditions were volatile.
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UBS Group made a rare entry into the euro market on Tuesday, issuing €1.5bn of new senior paper in line with fair value.
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Barclays was met with strong demand for its second green senior deal in the sterling market on Tuesday, allowing the bank to shave 25bp off initial guidance and price through fair value.
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Bankers are confident that Canadian covered bond issuance will resume after the Bank of Canada withdrew the repo eligibility of retained covered bonds, while honouring existing repo deals. But bankers are split as to whether supply will restart this year or be deferred until next year.
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Nearly half of Europe’s banks do not intend to participate in the next rounds of the Targeted Longer-Term Refinancing Operations (TLTRO III), according to the results of a new survey published by the European Central Bank this week.
Polls and awards
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Bond market's leading performers recognised at GlobalCapital's annual awards ceremony
The awards recognise the market's leading deals, issuers, banks and other participants
The winning institutions and individuals will be revealed at the awards dinner on June 17 in London
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