Covered Bonds

Duration returns to euro covered bonds but supply wave looks unlikely with relative value a sticking point

◆ Issuer prints €2.25bn across two tranches ◆ 10 year tranche solidifies returning long end demand ◆ Slim premium needed on both tranches

◆ Deal is third Austrian sub-benchmark in three weeks ◆ Seven years a sweet spot for investors ◆ Austrian supply down from last year with a rush of supply not expected

Second tier names should not wait to issue, or they risk the spread compression running out of steam

◆ Macquarie five year follows in CBA's tailwind ◆ Pair pay minimal premiums ◆ Macquarie's first covered bond since 2022

◆ German Länder used to guide pricing ◆ Book holds firm as deal lands tight ◆ Wave of 15 year supply unlikely, but 10 years a possibility

When you reflect on your banking career — the thousands of pitch books, the countless analyses, iterations, scenarios, recommendations, and timetables — the gnawing question is whether you ever really added any value. Were you a strategic advisor and master tactician or just a Willy Loman with more air miles?

◆ Deal lands flat to recent Pfandbriefe ◆ No concession needed ◆ Tight domestic spreads drive Nordic investors towards euro prints

Deal set to be the longest euro covered bond since May last year

Single digits separate core and non-core euro covered spreads

German, French and Dutch banks the most likely candidates for the next long end deal

◆ Rare Portuguese issuer lands very close to Pfandbrief ◆ Tightening in covered bond spreads prompts divergent views on where fair values are ◆ Both issuers fund close, if not flat to, perceived fair values