Real money investors are returning to covered bonds and the market is Getting Back on Track, according to key investors and issuers who took part in The Cover’s roundtable that was held in February in conjunction with Crédit Agricole CIB. 

Deal reviews

  • NIBC issues longest core CPT ever

    NIBC Bank issued the longest ever maturing conditional pass-through (CPT) covered bond from a bank in Europe’s core on Tuesday. The granular order book and modest new issue concession suggested that market conditions have stayed strong.

Analyst research

  • ECB tapers CBPP3

    The European Central Bank has stepped back covered bond purchases despite much higher supply so far this year compared to last.

RMBS primary news

Mandates & deal pipeline

  • BNZ hits the road

    Bank of New Zealand has mandated leads to roadshow its first euro benchmark in four years. It joins Westpac New Zealand and SR Boligkreditt which are also marketing deals.

  • DBS considers Aussie covered

    Development Bank of Singapore has appointed leads to explore the possibility of issuing its first benchmark in Australian dollars. DBS has yet to issue its first deal in euros, where market liquidity and depth is considered superior to any other currency.

  • Westpac, SR Boligkreditt mandate for new euro deals

    Norwegian issuer SR Boligkreditt and New Zealand issuer Westpac NZ will both take new euro deals on the road before the end of May.

  • TSB will issue covered bonds

    After recently issuing its debut RMBS, TSB Bank, the UK bank that was spun off from Lloyds, has filed vehicles suggesting it will turn to covered bonds.

Rating news

  • Carige downgrade could spur pass through transformation

    Banca Carige may follow the example of Portugal’s Montepio, which on Friday said it would restructure its covered bond programme to a conditional pass-through (CPT), resulting in a three notch upgrade. The Italian bank’s bonds were junked by Fitch on Thursday, and with access to primary markets at risk, it may copy Monte dei Paschi Siena which switched to a CPT last year.

  • Moody’s talks up Turkish covered bonds

    Moody’s has talked up the positive credit aspects of Turkish covered bonds in an in-depth report which it published on Thursday. However the agency says Turkish covered bonds remain susceptible to tail event risks such as the political environment — a point which locals dispute.

  • Smaller banks’ covered bonds are less likely to be resolved

    BRRD does not specifically link covered bonds to a particular resolution strategy. This uncertainty is less of a concern for large systemic banks, but because smaller failing banks are less likely to be resolved, their covered bonds are at higher risk of default, said Moody’s.

Regulatory developments

In-depth analysis and interviews

  • Pass-through panned at CEE conference

    Investors derided the covered bond conditional pass-through (CPT) mechanism at the CEE Covered Bond Forum held this week in London. They said the structure had been mispriced and would give regulators a strong disincentive to intervene on behalf of noteholders.

Market wrap

Secondary market

  • Spreads: one way only

    Covered bond spreads are set to head tighter, though the risk of a repricing has kept real money investors more focussed on non-Eurozone bonds. Peripheral markets are considered most vulnerable to a repricing but still offer tremendous value against the corporate sector.


  • EM meets covered bonds thanks to ECB

    Vakifbank’s euro Turkish covered bond is good for investors, good for emerging markets borrowers and good for the global economy. But the deal would probably never of happened without the intervention of the European Central Bank.

  • Euphoric mood set to persist

    Capital markets were roaring this week, but despite increasing signs of frothiness, the euphoria looks set to persist for some time longer.

  • Removing swaps in covered bonds is the way forward

    Several covered bond issuers have removed the swaps in their covered bond programmes, in the face of onerous regulatory obligations. This has improved their funding efficiency and given investors a less risky, more transparent, and potentially higher yielding product. Others should follow.

People moves

Deals tracker

Priced Deals

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Deals pipeline

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Book runner

Covered bonds €500m+ YTD to April 11  2016

Lead manager Amount
No of Issues Share %
1 LBBW 5.81 30 8.2
2 Credit Ag' 5.52 24 7.8
3 UBS 4.78 20 6.8
4 BNP Paribas 4.47 19 6.3

 league table builder

All covered bonds YTD April 11 2016

Lead manager Amount
No of Issues Share %
1 LBBW 6.48 33 6.6
2 Credit Ag' 6.27 27 6.4
3 UBS 6.06 32 6.2
4 BNP Paribas 5.36 22 5.5

 league table builder