UK

Northern Rock Asset Management (NRAM) will repurchase its €2bn 3.875% November 2020s at 121.494.

UK covered bond programmes have the highest foreign exchange gap according to Moody’s. But the fact UK issuers have issued predominately issued in sterling this year shows they are attempting to reduce this exposure.

Nationwide Building Society is continuing its funding run after already setting a strong precedent in 2014. The bank has priced its first sterling covered bond of 2015 following an earlier euro covered bond, a multi currency RMBS and two senior deals issued this year.

Northern Rock Asset Management (NRAM) announced on Monday that it expects a meeting, to be held in relation to a previously announced covered bond tender offer, to be quorate.

Non-core eurozone issuers are set to play an increasing part in the covered bond market as the European Central Bank (ECB) purchase programme drives yields towards new lows. While minimal new issue premiums and negative spreads have not yet deterred investors – oversubscription rates were up this week – bankers are debating if the inflection point is in sight.

Abbey National Treasury Services returned to the covered bond market on Tuesday to issue the second only UK covered bond of the year in euros. The rarity of UK euro issuance combined with a constructive market backdrop and a positive spread to mid-swaps propelled demand for the deal, particularly from high quality asset managers and central banks.

Northern Rock Asset Management (NRAM) made a tender offer for its €2bn 3.875% November 2020 on Monday and will pay a 2% premium. The bank has also proposed an extraordinary resolution to redeem all notes other than those tendered, for which it will not pay a premium.

Lloyds Bank plc returned to the sterling covered bond market for the second time this year to issue the first fixed rate deal in the UK currency since 2012 on Friday. Following the long run of three year floaters the issuer priced a seven year, which benefitted from new ICMA guidelines, applied for the first time to sterling covered bonds.

China Construction Bank (CCB) and Commerzbank have launched the first Ucits-compliant ETF fund under China’s RQFII scheme. The fund, which was announced on March 25, will invest in China’s money market.

Bank of America Merrill Lynch and Deutsche Bank are working on allocations tonight on the IPO of Auto Trader, which has been a big success.

Afren, the London-listed, Africa-focused oil exploration company, has heralded its initial agreement with a group of lenders and bondholders as the only way to avoid default.

The UK’s Coventry Building Society spurned the conventional three year sterling floating rate covered bond sector, and following its recent roadshow, sold a five year floating rate sterling benchmark covered bond on Tuesday.