SME-backed covered bond debate drags on
The subject of SME-backed covered bonds continues to provoke a sharp division of opinion within the industry. And it was a lively topic at the annual covered bond investor conference, held on Thursday in Frankfurt.
ING sets personal best with latest 10 year
ING priced its tightest ever covered bond this week —inside the French sovereign curve. It demonstrated deep demand at the long end despite low yields, said bankers.
Gadea sets out Cajamar’s regular ambition
Miguel Angel Gadea, head of funding at Cajas Rurales Unidas (Cajamar), spoke to The Cover on Wednesday, following its debut deal as a merged entity. Cajamar, which plans to be a regular issuer, has grown deposits, expects to raise its core capital ratio this year and aims to stabilise its ratio of non-performing loans with a proactive approach to servicing.
Bankinter basks in cheaper funding and foreign support
Bankinter’s latest €500m tap this week came with a tighter spread and drew more international accounts than the borrower has managed with any benchmark deal in recent years. As its issuance costs drop its loan portfolio is becoming profitable, and though it remains barred from the senior unsecured market, comfortable covered bond funding costs and foreign demand are steps in the right direction, a funding official told The Cover.
LF Hyp to issue more often, says Rydin
Länsförsäkringar Hypotek (LF Hyp) plans to issue smaller, but more, regular covered bond deals. Speaking to The Cover on Tuesday, vice executive president and head of treasury, Martin Rydin, said that due to growth in deposits and senior unsecured funding, covered bond funding will account for a smaller proportion of the bank’s overall need.
Encumbrance obsession ‘misses the point’
Dutch bankers have hit back at suggestions that the local regulator’s increased focus on encumbrance is behind a fall in covered bond issuance. The obsession with covered bond encumbrance does not give a true picture, they told The Cover this week.
Kaupthing flies the flag for covered bonds
Eirikur Jensson, head of funding at Arion Bank in Iceland, formally Kaupthing Bank, talked to The Cover about the bank’s restructuring. In the context of regulations that oblige the bailing in of senior unsecured investors, potentially within the next three years, its case history argues strongly in favour of the covered bond asset class, irrespective of whether there is a legal framework or not.
Investors learn to love low yields
The quiet period for FIG ended this week with a handful of deals emerging in the covered bond and senior unsecured markets. And in contrast to several tightly priced core European deals seen earlier this year, in which investors had pushed back on terms seen as too aggressive, bankers are now reporting a shift in sentiment.
Desperate investors seek radical alternatives
Two leading covered bond investors based in Germany have told The Cover why they are investing, despite record low yields, and what strategic shifts they are pursuing.
‘All about timing,’ says HSBC’s Sankoff
Neil Sankoff, head of senior funding, in HSBC's global balance sheet management division, has spoken to The Cover about Tuesday’s €1.25bn 10.5 year Obligation à l'Habitat and the bank’s global funding strategy. With no formal marketing, the deal was all about timing, he said.