Market wrap

  • Issuers sit out amid volatility

    Weak European equities, the German public holiday and Chinese New Year meant primary issuers sat on the sidelines on Monday, but secondary market activity was more constructive.

Rating news

  • Triple-A ratings for first Macquarie deal

    Fitch Ratings and Moody’s Investors Service have both assigned provisional triple-A ratings to Macquarie Bank’s inaugural covered bond, which started its roadshow on Monday.

  • DBRS sets out new methodology

    The Canadian rating agency has published a request for comment following a newly proposed rating methodology that introduces a new and higher rating gauge for systemically important banks called the Critical Obligations Rating (COR) criteria and which could lead to a covered bond rating upgrade at 11 banks.

RMBS primary news

Analyst research

  • Covered bonds don’t meet LCR requirements

    Covered bond euro benchmarks issued by banks in the euro area do not fulfil the quantitative requirements of the liquidity coverage ratio, according to new research by Barclays analysts.

  • Danish auctions underway

    The refinancing auctions of Danish non-callable covered bonds for the April term began on Friday, where demand for three and five year non-callable bonds is expected to be strong, said analysts at Danske Bank.

Deal reviews

  • CMCIC takes size

    Crédit Mutuel CIC took advantage of the strong reception enjoyed by BPCE earlier this week to issue a €1.5bn long six year, the seventh deal of this size seen so far this year. The transaction was comfortably oversubscribed and the order book built rapidly.

  • Strong demand for SEB

    Swedish issuer SEB launched a new five year covered bond on Thursday, and despite coming only a day after Swedbank’s well subscribed bond, pulled in a large book for a €1.5bn deal.

  • Hypo Tirol shows hope for Austria

    Hypo Tirol was never expected to be an easy trade given lingering concerns about Austria’s smaller banks and the aftermath of the Heta Asset Resolution debacle. So it was a relief when, on Thursday, the issuer managed to attract an oversubscribed and relatively well distributed order book for its €500m five year mortgage-backed covered bond.

  • ANZ funds cheaper in sterling than euros

    Australia and New Zealand Banking Group took advantage of improved market conditions on Thursday to launch a new three year £500m floating rate covered bond. The funding was more competitive than what it could have achieved in the euro market.

  • Swedbank gets biggest book with tightest concession

    Swedbank was set to issue a €1.25bn five year covered bond on Wednesday. The deal attracted more investors than any other covered bond this year, and a larger volume of orders. The new issue concession was small, but the deal’s success was driven by a yield nearly 0.5% more than OBLs

  • BPCE shows seven year is back in gear

    BPCE issued a €1bn seven year mortgage-backed covered bond attracting an exceptional level of subscription from a broad range of real money investors. The transaction, along with earlier deals from AIB and CaixaBank, shows that the seven year tenor is now firmly back in vogue, offering the right trade-off between duration and yield.

  • Caixabank frontloads with its largest deal since 2011

    Caixabank has become the fourth Spanish bank to tap the covered bond market this year with its largest Cédulas in five years. That four borrowers have launched similar sized deals of around €1.5bn so far this year suggests volatile market conditions are causing banks to frontload their funding.

  • Abbey attracts fair demand but some price sensitivity

    Abbey National's €1bn five year issued Monday was comfortably oversubscribed but exhibited some price sensitivity.


  • ECB breathes life back into covered bonds

    It is no coincidence that Tuesday’s €1bn covered bond from BPCE attracted more investors for a French seven year deal than at any time in the last year. The European Central Bank has started to scale back its purchases. The issuer also made

Regulatory developments

  • Danske to split Swedish and Norwegian cover pools

    Danske Bank has announced plans to shake up its covered bond programme, with a view to funding its Swedish home loan programme through a new local entity.

  • European Commission embraces the diversity of covered bonds

    European Union Commissioner Jonathan Hill embraced price differentiation and product diversity in covered bonds on Monday. The speech was widely welcomed by practitioners who fear that the ambitious approach to harmonisation advocated by the European Central Bank would be disruptive, unworkable and unnecessary.

  • Covered bond harmonisation should be ‘ambitious’ says ECB

    The European Central Bank has said efforts to raise minimum standards in the covered bond market should be ambitious, and it sees considerable benefits in harmonisation. The ECB was responding the European Commission’s proposals for harmonisation of the covered bond market.

Mandates & deal pipeline

  • Covered pipeline rebuilds

    Hamburger Sparkasse AG (Haspa) and Hypo Tirol Bank have respectively mandated leads for a roadshow and an investor call update.

In-depth analysis and interviews

  • The heat is on over Heta as creditors prep revolt

    A large group of investors is determined to reject a buyback offer on billions of euros in soured bonds guaranteed by the Austrian State of Carinthia — an offer that may represent the province's only chance of avoiding an unprecedented bankruptcy. Covered bonds are unaffected.

Secondary market

  • Italian covered bond bids hard to find

    Spreads on covered bonds from Italy’s weaker credits have shot skyward this week, with indicative bids in the worst affected names out by at least 25bp since the start of the year. The moves have followed renewed concerns over their non-performing loans.

  • FMS-WM tenders for DEPFA bonds, plans to buy more

    FMS Wertmanagement has launched two separate tender offers on the Irish Stock Exchange for euro, swiss franc, US and Canadian dollar denominated covered bonds issued by DEPFA Bank and DEPFA Pfandbrief Bank SA.

  • Weaker secondary points to further widening

    All but one of the primary euro denominated covered bonds issued this year, whether they can be bought by the ECB or not, have widened after issue.

People moves

Deals tracker

Priced Deals

Search the full priced deals table here

Book runner

Covered bonds €500m+ 12m rolling to January 11  2016

Lead manager Amount
No of Issues Share %
1 Natixis 11.25 69 7.5
2 Commerzbank 9.07 60 6.0
3 HSBC 8.99 48 6.0
4 Credit Agricole 8.64 50 5.7

 league table builder

All covered bonds 12m rolling to January 11 2016

Lead manager Amount
No of Issues Share %
1 HSBC 15.24 74 6.3
2 Natixis 13.50 76 5.6
3 UBS 12.82 78 5.3
4 Commerzbank 11.24 78 4.6

 league table builder

Deals pipeline

Search the full deal pipeline table here