Covered Bonds
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Leads to use comparables ranging from South Korea to Denmark when pricing upcoming deal -
German issuer's own comparable tenor deals disregarded in favour of more recent peer supply
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Investors keen on duration as Thermo Fisher and Pfandbriefzentrale also go longer
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Estonian lender set to join Austrian and German-led sub-benchmark flurry
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The trade drew good demand after a slow week for covered bond issuers
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The specialist lender's rare appearance in the market will be for £500m
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Investors are becoming more price sensitive, said one banker
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◆ Deal is third Aussie trade in a week ◆ Aussie lender takes size ◆ Slim orderbook necessitates slim premium
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◆ 10 year note raises €750m alongside €500m five year ◆ Longer note lands double digits through govvies ◆ Slim to no premiums paid for both bonds
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Duration returns to euro covered bonds but supply wave looks unlikely with relative value a sticking point
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◆ Issuer prints €2.25bn across two tranches ◆ 10 year tranche solidifies returning long end demand ◆ Slim premium needed on both tranches
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◆ 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
