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Deal reviews

  • Muhyp prices first ESG Pfandbrief

    Münchener Hypothekenbank (Muhyp) has priced the first covered bond backed by environmental and social governance (ESG) mortgage loans. The €300m deal attracted a rich new seam of demand from investors that had never bought covered bonds from this issuer, in a move that is expected to spur other borrowers to consider ESG covered bond deals of their own.

  • Danske Bank takes benchmark deal sub-Euribor

    Danske Bank opened books on Wednesday on a triple-A rated five year euro benchmark, its second euro deal of the year coming soon after its seven year sterling transaction early last week. A solid book build blew away Tuesday’s concern that a soft credit market and a series of upcoming potentially disruptive events may have turned the deal sour.

  • RBC shows firmer dollar footing

    Royal Bank of Canada returned to the dollar covered bond market for the first time this year, issuing the third benchmark in that currency this month. The $1.75bn deal priced at 27bp over mid-swaps, making it the equal largest this year and tightest in dollars for several years.

Mandates & deal pipeline

  • CCDJ to go on euro roadshow

    La Caisse Centrale Desjardins du Quebec (CCDJ) has hired Barclays, Crédit Agricole and DZ Bank to organise a series of European investor meetings for its second euro covered bond.

  • Danske bank mandates euro benchmark

    Danske Bank has mandated leads for a five year euro benchmark, its third benchmark this year and second in euros. The deal is expected to be launched on Wednesday.

Rating news

  • Danish FSA proposals are credit positive, says S&P

    Proposed changes to Danish mortgage regulation could reduce credit risk in Danish covered bond pools, potentially leading to lower target credit enhancement, said Standard and Poor’s (S&P) on Wednesday.

Regulatory developments

  • Danish FSA proposals will lower mortgage risks

    The Danish Financial Supervisory Authority’s proposal to limit interest-only loans to 55% of total lending on mortgages with a loan to value (LTV) ratio of 75% or more should encourage mortgage borrowers to take longer duration loans and may help assuage rating agency concerns over refinancing risk, said Nykredit analysts on Friday.

People moves

Market wrap

  • Event-driven week keeps lid on supply

    Despite two mandate announcements on Tuesday, event risk will keep supply well below last week’s booming level, bankers and traders told The Cover on Tuesday morning.


  • ECB: failure or masterstroke?

    The European Central Bank’s announcement of a third covered bond purchase programme is destined for failure. The size of the public market for benchmark euro covered bonds stands at about €570bn, suggesting the central bank would be unable to achieve anything close to its €500bn target through covered bonds alone.

In-depth analysis and interviews

  • Covered bond buying branded ‘insane’ as ECB goes for QE-lite

    The European Central Bank surprised ABS bankers and infuriated many of their covered bond peers on Thursday by committing to a broad purchase programme for both asset classes. The move was welcomed in the ABS market and sparked a fresh hunt for secondary paper, but deprived of more detail bankers were unable to say how quickly the measures would encourage more primary issuance, if at all.

  • Podcast: Tim Skeet on bail-ins and bail-outs

    Tim Skeet, global head of covered bonds at Royal Bank of Scotland speaks to The Cover about his work as chairman of the International Capital Markets Association (ICMA) Asset Management and Investor Council working group on bail-in.

  • Podcast: Jens Tolckmitt on the future of the Pfandbrief

    Jens Tolckmitt, chief executive of the Association of German Pfandbrief Banks (vdp) speaks to The Cover about Pfandbrief quality — "striving to be first in class".

  • Podcast: Marlatt & Calabria say US covered bonds in sight

    Jerry Marlatt, senior council at Morrison & Foerster LLP and Dr. Mark Calabria, director of financial regulation studies at the CATO Institute speak to The Cover about the Volcker rule and the outlook for US covered bonds.

Analyst research

  • EEPK safe but spreads may widen

    Standard and Poor’s has downgraded Erste Europaeische Pfandbrief-und Kommunalkreditbank (EEPK) Lettres de Gage (LdG) to BBB+ from A- and has withdrawn the rating. The issuer is being wound down and could potentially terminate all ratings leading to a widening in its spreads.

  • Caixa’s Cédulas safe after Barclays acquisition

    Caixabank announced on Sunday that it had bought the Spanish operations of Barclays, subject to regulatory approval. The Cédulas cover pools are likely to be merged, but with the risk metrics of both being fairly similar, the rating impact should be neutral, said Credit Agricole analysts on Monday.

Secondary market

  • Covered bonds power through Ukraine crisis as liquidity fest looms

    European covered bonds extended their good run of solid trading with decent buying of the weakest names reported on Friday, in stark contrast to subordinated debt. Though traders and investors have been more unsettled of late following news of an escalation in military tensions in Ukraine, covered bonds have proved their mettle as investors factor in an expected surfeit of central bank liquidity and an even more favourable regulatory environment.

Deals tracker

Priced Deals

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Deals pipeline

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Book runner

Covered bonds €500m+ to May 29  2014

Lead manager Amount
No of Issues Share %
1 BNP Paribas 4.51 20 8.5
2 UniCredit 4.38 29 8.2
3 Natixis 4.09 21 7.7
4 Commerzbank 3.38 21 6.3

 league table builder

All covered bonds to May 29 2014

Lead manager Amount
No of Issues Share %
1 UnCredit 7.60 51 7.9
2 Natixis 7.36 27 7.7
3 BNP Paribas 6.58 23 6.9
4 UBS 5.12 31 5.3

 league table builder