News

• Aareal closes €500m no-grow but stalls on guidance

  Posted 22 Hours ago

  Aareal Bank priced the covered bond market’s fourth Pfandbrief in a row in on Wednesday. It was unable to tighten pricing from guidance but drew enough demand for its €500m no-grow deal.

• Commerzbank will come back for more

  Posted 22 Hours ago

  Commerzbank plans to be a regular public sector Pfandbrief issuer following its inaugural deal this week and it is working on a new mortgage backed programme, it told The Cover on Wednesday.

• Caffil and RLB Niederösterreich hit the road

  18/06/2013

  Two issuers joined the primary covered bond pipeline on Tuesday, improving the market outlook. Caisse Francaise de Financement Local (Caffil) and Raiffeisenlandesbank Niederösterreich-Wien AG have both mandated banks for deals, which will be preceded by roadshows

• Commerzbank follows in five year

  18/06/2013

  Commerzbank priced its inaugural public sector benchmark covered bond on Tuesday. The latest issue was another five year, after Aktia Bank and Helaba broke the drought in that maturity on Monday. Despite investors becoming more risk averse, funding officials at Aktia and Helaba told The Cover on Tuesday that the five year was their choice of tenor and said this was not dictated by market conditions.

• Aktia and Helaba end five year drought

  17/06/2013

  Finland’s Aktia Bank and Germany’s Landesbank Hessen-Thueringen issued in the five year on Monday, ending the drought in this maturity. The moves suggest a change in risk appetite and a greater borrower willingness to offer new issue premiums.

• Busy week predicted for issuers

  14/06/2013

  The outlook for primary covered bond issuance is expected to improve next week as the market has begun to stabilise and issuers will look to take advantage of the short funding window that precedes summer. And with the longer term outlook expected to be less certain there is less incentive to postpone issuance.

• Fitch plays down borrower risk for covered investors

  13/06/2013

  Strong political support for depositors makes the risk of losses to covered bond investors from borrowers setting off loan payment obligations against insured domestic bank deposits highly remote in most EU countries, Fitch said on Thursday.

• Liquidity curse for top credits

  13/06/2013

  Triple-A covered bonds are underperforming triple-B, while Spanish multi-Cédulas are outperforming single-name, Markit iBoxx indices show. But the relative performance is due to the better liquidity of stronger credits, traders warned, and market prices would not reflect index spreads.

• Tax and encumbrance need rethink, says ECBC

  12/06/2013

  Europe’s planned financial transactions tax will have dangerous consequences for liquidity and the real economy, covered bond bankers are set to tell regulators. They will also highlight the problems with encumbrance reporting that the European Banking Authority wants to introduce and they will say that there is no single solution to SME financing. The European Covered Bond Council will set out its response to these issues at its steering committee meeting in Lisbon at the end of the month.

• Commerzbank unveils public sector programme

  11/06/2013

  Commerzbank is marketing its new public sector backed covered bond programme, after gaining ratings from Moody’s and Fitch. It is collateralised mainly by export credit agency (ECA) guaranteed loans, unlike the bank’s old Eurohypo programme, put into wind down in 2012, which was backed by loans to municipalities.

• CRH hits long end with expensive 12 year

  11/06/2013

  Caisse de Refinancement de l'Habitat (CRH) sold its second Swiss franc covered bond of the year on Tuesday, targeting the long end with 12 year paper. While it was able to fund at a favourable level compared to its curve, the long maturity hampered orders.

• France bears brunt of selling but Germany holds firm

  11/06/2013

  Selling continued in the secondary market on Tuesday, covered bond dealers said, with French, Norwegian and UK bonds hardest hit. German, Swedish and Finnish markets have held in better.

• Aktia mandates with Moody’s top rating

  10/06/2013

  Finland’s Aktia Bank mandated leads on Monday for its first covered bond, that Moody’s has provisionally rated Aaa. Despite high quality collateral, the covered bond rating is vulnerable to a downgrade of the borrower.

• Fragile stability returns as German court hearing looms

  10/06/2013

  Markets opened on a surer footing on Monday but after last week’s volatility bankers want to see more stability before restarting primary issuance. Tuesday’s German constitutional court hearing on the ECB’s Outright Monetary Transactions programme will also have a strong bearing on sentiment, they said.

• Covered rout has legs; primary woes mount

  07/06/2013

  Secondary market selling of covered bonds slowed a little on Friday ahead of the US payrolls report. But bankers say the US data won’t make much of a difference as further selling is likely. In the primary market there is concern that if a deal is incorrectly priced, it will add to problems and potentially close the funding window for other issuers

• Santander aims to open new Chilean covered market

  07/06/2013

  Banco Santander Chile is expecting to issue the first ever covered bond from the Andean country in July, aiming to create a liquid market that can support one of the most developed mortgage markets in emerging economies. However, an international placement will be a challenge.

• Encumbrance steady, says Fitch

  06/06/2013

  Cover pool encumbrance was steady last year versus the previous year, Fitch said on Thursday. The most stable levels were among the most encumbered institutions, where covered bonds have made up a large share of their financing for a long time.

• SEC registration: one’s a company, two’s a crowd

  06/06/2013

  Scotiabank filed for SEC registration this week, increasing the likelihood of other issuers filing programmes with the SEC, a US lawyer told The Cover on Thursday.

• SME covered bonds gaining ground, says Moody’s

  06/06/2013

  Covered bonds backed by loans to small and medium-sized enterprises (SMEs) are gaining traction as a funding tool for European banks and could soon become a feature in Italy, Spain and France, according to Moody’s.

• Denizbank sells first tranche of SME-backed bond

  05/06/2013

  Denizbank launched the first tranche of its SME-backed covered bond on Thursday, and placed the bonds with three supranational agencies.

• RLB Steiermark finds ‘compelling’ price for mortgage debut

  05/06/2013

  Raiffeisen-Landesbank Steiermark built a solidly oversubscribed book for only the second 15-year covered bond of the year, enabling leads to price inside guidance in what they said was still an issuers’ market, despite the more volatile macroeconomic backdrop.

• UniCredit brings lowest coupon Italian covered bond

  05/06/2013

  UniCredit priced the tightest covered bond since the start of the crisis on Wednesday, achieving the lowest coupon for an Italian covered bond. Waleed El Amir, the bank’s head of long term funding, group finance, spoke to The Cover about the deal.

• Yes it’s a herd, but it might just be rational

  05/06/2013

  Covered bond issuers have finally woken up to the realisation that conditions are not going to get any better for them any time soon. Rather than hold out for yet another basis point, some have decided to pile into the market. There is a risk of overcrowding, but that’s probably better than the alternative — leaving it too late.

• Chilean and Canadian firsts

  04/06/2013

  Santander Chile is set to issue Chile’s first domestic covered bond this month. It will be triple-A rated and have a 15 year maturity. Meanwhile in Canada, Bank of Nova Scotia is lining up an SEC registered deal, the first off the country’s new legal framework.

• RLB Steiermark returns with debut mortgage deal

  04/06/2013

  Austria’s Raiffeisen-Landesbank Steiermark has mandated leads for its debut mortgage-backed covered bond, a no grow €500m issue that could be launched as early as Wednesday. However, it has yet to decide on maturity, perhaps waiting to see how well other deals are received before making a final call.

• Sparebank offers small premium in busy market

  04/06/2013

  Sparebank 1 Boligkreditt opened books for a seven-year €1 billion covered bond backed by prime Norwegian residential mortgages on Tuesday. The deal attracted a granular, but not hugely oversubscribed book, after pricing with a small new issue premium in a busy market.

• UniCredit cuts funding costs again

  04/06/2013

  The new issue covered bond market gathered momentum on Tuesday with two fresh deals, including one from UniCredit which should substantially cut its cost of funding.

• Insurers wait on US data before diving in

  03/06/2013

  Despite the start of a new quarter, investors are not pushing money into covered bonds, secondary market dealers told The Cover on Monday. Bunds have weakened in line with US Treasuries but the rise in yields has not tempted insurance companies to buy bonds. They are waiting for key US employment data due on Friday, which could trigger a further yield hike, before making any move, said bankers.

• Medium-sized Italians and Austrians look for label

  03/06/2013

  Medium-sized banks in Italy and Austria could be next in line to sign up to the European Covered Bond Label, an initiative that has been dominated in its first six months by larger issuers, the European Covered Bond Council told The Cover on Monday.

• Volatility no bar to Deutsche Hypo’s €500m

  03/06/2013

  Deutsche Hypothekenbank took advantage of a ratings lift from Moody’s to launch a €500m seven year mortgage Pfandbrief into a quiet primary market on Monday, despite the uncertain macro-economic backdrop which has caused fixed income volatility.

• BNP Paribas makes Dutch return with new Phedina RMBS

  31/05/2013

  The Dutch arm of BNP Paribas Personal Finance will begin a roadshow next week for its second ever publicly sold RMBS.

• Markets don't just go up

  31/05/2013

  This week’s spike in volatility was a warning shot. It was unreasonable to expect the grab for fixed income yield to last for ever — and the world needed reminding that markets don’t just go up. After nearly eight months of one-way traffic it was hardly surprising that a false sense of security had developed.

• More in store amid rumours, roadshows and redemptions

  31/05/2013

  The covered bond pipeline is building with several transactions rumoured, a New Zealand bank on the road and a German issuer on Friday mandating banks for a trade next week.

• New issue premiums set to rise

  31/05/2013

  Credit markets are on the back foot but bankers say the outlook for covered bonds is still relatively benign. However, investors are becoming more price sensitive and issuers need to take into account the changed market environment if a mishap is to be avoided, bankers said.

• Buy and sell side sanguine in the face of volatility

  30/05/2013

  Equity and bond market volatility continues to weigh against sentiment and net flows in the covered bond market have been biased to the offered side this week. But traders and investors are sanguine on the outlook for covered bonds, despite market concerns over a possible asset bubble, an end to the Federal Reserve’s quantitative easing and Japanese bond market volatility.

• NAB issues Australia’s longest in euros

  29/05/2013

  National Australia Bank returned to the covered bond market on Wednesday to issue the longest dated euro covered bond deal from an Australian issuer. The €750m 12 year is expected to appeal to yield hungry insurance funds with its generous spread pick up to existing long dated Australian deals.

• Navarra success despite yield question

  29/05/2013

  Caja Rural Navarra looks set to price its inaugural €500m five year covered bond at the tight end of guidance on an oversubscribed book. But concerns over absolute yield levels and the less than stellar performance of Cajas Rurales Unidas’s recent deal could spook investors, despite the attractive spread, said bankers.

• Belfius takes KBC’s seven year course

  28/05/2013

  Belfius Bank on Tuesday followed the footsteps of KBC bank, mandating and launching a seven year mortgage backed covered bond with pricing being closer to its Belgian peer than any previous funding. Deutsche Pfandbriefbank also reopened its March 2020 for an attractively priced €250m tap.

• BIS links capital to encumbrance

  28/05/2013

  The Bank of international Settlements has suggested that local regulators may seek to limit the level of balance sheet encumbrance by linking it to the level of capital that a bank needs to hold.

• Crédit Agricole finds public traction

  28/05/2013

  Crédit Agricole SCF returned to the covered bond market for the second time this year with its second ever public sector backed deal. The €1bn 10 year transaction priced through the OAT, which was the first time in the history of the French covered bond market.

• Pbb makes triumphant return to public sector Pfandbrief

  24/05/2013

  Deutsche Pfandbriefbank (Pbb) returned to the public sector Pfandbrief market in style this week. It extended the German covered bond curve with an impressive 15 year deal and plans to issue at least one public sector backed bond a year, it told The Cover.

• Syndicates pitch ultra-long end for peripherals

  24/05/2013

  Holidays in Germany and the UK next week shrink the issuance window but covered bond bankers still expect benchmark deals. A seven year tenor makes for simple execution, but Deutsche Pfandbriefbank’s (Pbb) 15 year bond has captured issuers’ imaginations, said syndicate officials.

• SEB’s Wang talks up great granularity

  23/05/2013

  Speaking to The Cover on Thursday, SEB’s head of treasury management John Wang emphasised the granularity of the book for the bank’s inaugural dollar trade that was launched on Tuesday.

• Westpac prices tightest five year

  23/05/2013

  Westpac became the third issuer in less than a week, and the 10th this year, to tap the US dollar covered bond market. After mandating joint leads for a $1.25bn transaction on Wednesday the deal was priced at the tight end of guidance at 35bp over mid-swaps, which was the tightest five year print in dollars so far this year.

• WL proved right with ambitious price target

  23/05/2013

  WL Bank priced a €500m seven year Pfandbrief almost flat to mid-swaps on Thursday, to the surprise of some syndicate bankers on the deal.

• Covered bond encumbrance is trivial relative to depositor preference

  22/05/2013

  The fuss over covered bond issuance and the impact of asset encumbrance on the senior unsecured claim is nothing more than a warm-up act for the main show — the fading away of senior unsecured bank debt due to depositor preference.

• Pbb in lightning quick 15 year flourish

  22/05/2013

  Deutsche Pfandbriefbank launched the longest German Pfandbrief in nine years on Wednesday, pricing a €500m 15 year deal. The potential for more ultra-long dated deals is limited, but Pbb’s success in an unusual tenor illustrates just how flexible desperate investors have become, said bankers.

• SEB makes dollar debut as Westpac mandates

  22/05/2013

  Skandinaviska Enskilda Banken successfully issued its maiden dollar denominated covered bond on Tuesday, attracting a comfortably oversubscribed and granular book at a funding level that was close to what it could have achieved in the local market. Westpac has mandated leads for a follow on 144A dollar benchmark.

• WL plans Pfandbrief

  22/05/2013

  Rare issuer WL Bank has picked banks to manage its latest Pfandbrief and is aiming to launch a seven year euro denominated bond as early as Thursday, said bankers.

• Fitch upgrades Greek deals as S&P spies stability

  21/05/2013

  Fitch has upgraded a series of Greek covered bonds, following the sovereign upgrade of the Hellenic Republic and of Greek banks. Meanwhile, Standard & Poor’s said covered bonds had recently shown rating stability despite the fragile environment.