Mandates & deal pipeline

  • Alandsbanken lines up biggest bond yet

    Ålandsbanken is lining up to price a €250m covered bond and is meeting investors in Europe from May 5 – 12. This will be the Finnish bank’s largest covered bond to date.

  • BHH green bond to price with minimal concession

    Berlin Hypothekenbank is readying the market’s first Green Pfandbrief and is likely to launch the bond on Monday or Tuesday next week. Analysts expect there to be a minimal spread difference between the borrower’s green and conventional curves.

Deal reviews

  • UniCredit Czech and Slovakia makes international debut

    UniCredit Czech and Slovakia has set the final spread for the first covered bond to be backed by a mix of Czech and Slovakian mortgages. The bond has been expected since the borrower first met investors on a roadshow in November.

  • SG issues retains €5bn covered bonds

    Société Générale issued and retained over €5bn of covered bonds, spread over eight deals with maturities between six and 15 years on Monday. The supply provides contingency backstop liquidity for the bank, and forms a normal part of its liquidity management activity.

  • KBC returns for negative spread

    KBC priced its second €1bn covered bond of the year on Wednesday, this time opting for a 2021 which fits neatly into the borrower’s maturity profile and dips into mid-swaps negative territory for the first time. The deal also priced almost flat to its curve.

  • Sparebanken Vest pays no concession

    Sparebanken Vest Boligkreditt priced the first Norwegian covered bond of 2015 flat to its existing curve on Wednesday. The deal illustrates that rare issuers from core regions are still able to get superb execution despite the more skittish tone in credit markets lately.

  • Van Lanschot makes successful debut, prices flat to NIBC

    Van Lanschot Bankiers printed its inaugural conditional passthrough covered bond on Tuesday. A good quality book and a well flagged deal helped the issuer price flat to NIBC’s recent trade. Bankers said it paid a minimum market entry premium to make a successful debut.

  • Nationwide goes for funding full house with sterling FRN

    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.

Analyst research

  • Aareal Hypo Pfandbrief to get more German and more residential

    The mortgage cover pool backing Aareal Bank’s Pfandbriefe is expected to grow by roughly a fifth following its integration with the assets originated by Corealcredit, according to Commerzbank research analysts. The German exposure will rise, as will the proportion of residential loans.

Rating news

  • Longer covered bond issuance is credit positive says Moody’s

    The issuance of longer dated covered bonds in the first quarter compared to any other time in the past four years is credit positive according to Moody’s. This is because longer dated supply reduces the mismatch between assets and liabilities and lowers the probability of a fire sale, said the agency on Monday.

  • Fitch closes ratings escape route for frustrated issuers

    Structured finance and covered bond issuers hoping their deals will escape the waves of downgrades likely to hit the European banking system have had one of their routes out of the bind closed by Fitch. The agency, which could downgrade a third of European banks this year, is consulting on proposals which could effectively block issuers from including “rating removal language” in their deals, by stopping these deals reaching a triple-A rating.

  • French covered bond supervision has improved says Moody’s

    French covered bond regulations that improve transparency on asset liability mismatches and liquidity tests will not be made public, but they should improve supervisory oversight and lower refinancing risk for investors, said Moody’s on Friday.

Market wrap

  • Van Lanschot readies as Norwegian name considers

    Van Lanschot Bankiers is expected to open books on Tuesday for its inaugural conditional pass through covered bond. The first Norwegian deal of the year could be announced soon. Meanwhile Berlin Hyp is on the road with its Green covered bond.

Secondary market

  • NRAM gets quorate meeting

    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.

Opinion

  • Covered bond inflection point a way off

    Covered bond yields and spreads are spiralling lower and the prospect that wafer thin margins become even tighter has led to a legitimate concern that a turning point may follow. But with the European Central Bank backstopping everything, and the market still offering a decent return compared to Bunds, covered bond investors should be lining up to buy for some time yet.

Regulatory developments

  • Pbb expects €45m Q1 profit despite 50% Heta write down

    Deutsche Pfandbriefbank (pbb), the German Pfandbriefe issuer that will be privatised this year, said it expects to make a first quarter profit of €45m, even after writing down 50% of its exposure to Heta Asset Resolution.

  • European Commission backs Green covered bonds

    The European Commission is taking steps to encourage future deals in the new asset class. It published the findings of a report on Wednesday and recommends standardising the regulatory framework.

People moves

  • World Bank joins CBLF, underscoring commitment to EM

    The World Bank Group has appointed Loïc Chiquier, chief technical officer and senior advisor of the finance and markets global practice, as its observer representative on the Covered Bond Label Advisory Council.

In-depth analysis and interviews

  • BHH’s Grüner Pfandbrief marks new staging post

    Berlin-Hannoversche Hypothekenbank (BHH) mandated leads to market the first green pfandbrief, or Grüner Pfandbrief, setting the stage for further green covered bonds and RMBS due this year and next. In contrast to last year’s environmental and social governance deal from Münchener Hypothekenbank, the forthcoming transaction will be of benchmark size and will be backed exclusively by energy efficient buildings.

RMBS primary news

  • Rabobank’s RMBS is cheap to Dutch conditional pass throughs

    Rabobank’s Obvion subsidiary sold nearly €2bn of five year RMBS last Thursday, at a considerable spread pick up to where Dutch pass-through covered bonds from entities with much weaker ratings would be expected to price. The deal, originated by one of the best rated banks in the world and backed by very high quality collateral, suggested that covered bond investors could be missing out by not looking at the RMBS market.

Deals tracker

Priced Deals

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Deals pipeline

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Book runner

Covered bonds €500m+ YTD to Mar 27  2015


Lead manager Amount
€(bn)
No of Issues Share %
1 Natixis 3.90 25 9.6
2 HSBC 2.93 15 7.2
3 Credit Agricole 2.79 17 6.8
4 BNP Paribas 2.79 12 6.8


 league table builder

All covered bonds YTD to Mar 27 2015


Lead manager Amount
$(bn)
No of Issues Share %
1 Natixis 4.50 28 6.4
2 Barclays 3.91 18 5.6
3 HSBC 3.84 19 5.5
4 RBC CM 3.80 10 5.4

 league table builder