Mandates & deal pipeline

• Navarra set to raise €500m on back of 623% OC

  Caja Rural de Navarra has picked joint leads for a roadshow and possible deal. Its announcement late on Wednesday came after Moody’s said that the prospective A3 rated €500m Cédulas was overcollateralised by 623% which will allay negative equity concerns.

• Denizbank to restart SME surge as mortgage deals line up

  Turkey’s Denizbank is expected to price its SME covered bond within the month and there are hopes other issuers will follow. While the SME product is unlikely to be seen as anything other than niche, there are strong expectations that at least four borrowers will launch euro denominated mortgage backed deals in benchmark size.

• Aareal aims for sterling return

  Aareal Bank is the latest German borrower to tap the sterling market, having approached investors with price thoughts for a £200m three year floater.

• Better backdrop a boon for covered benchmarks

  Covered bond issuers decided against bringing benchmark bonds on Friday despite a better backdrop, but there are several potential deals in the pipeline and stronger sentiment should encourage issuers looking to come next week, said bankers.

• Akbank noses in front of Garanti in Turkish race

  Turkey’s Akbank could pip Garanti Bank to the post and issue the first euro denominated Turkish covered bond backed by residential mortgage assets. The issuer has been on the road pre-marketing a benchmark sized deal. With a higher rating than many Western European deals, and a market starved of supply, the deal should attract good interest, despite its emerging market label.

• Nykredit names banks for junior covered bond

  Nykredit announced a benchmark junior covered bond mandate on Wednesday, just a day after Standard & Poor’s warned that Danish covered bond ratings could become increasingly reliant on the junior asset class.

• Core issuers to maintain primary momentum

  Covered bond syndicate officials are predicting as many as five deals will be launched next week following a wave of successful core transactions.

• MuHyp moves towards sterling debut

  Münchener Hypothekenbank (MuHyp) closed another successful euro benchmark this week and could visit the dollar market later in the year. But it also has its sights on the sterling market, where investors have become increasingly receptive to the tight spreads German borrowers offer.

• Garanti gears up for Turkey’s first mortgage backed deal

  Turkey’s covered bond market is set to break away from SME-only issuance into mortgage transactions. Garanti Bank is planning a mortgage backed covered bond and several other issuers are keen to use the asset class to fund mortgage lending, said bankers.

• KölnBonn comes back to covered bonds

  Germany’s Sparkasse KölnBonn is preparing to return to the covered bond market with its first benchmark transaction in five years.