NordLB
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Two further Schuldschein deals at least doubled in size this week after Lonza's bumper earlier deal, as the market eclipsed its issuance level for the whole of 2016. -
Amalgamation of the German covered bond sector looks set to endure as Berlin Hypothekenbank (Berlin Hyp) will potentially subsume Deutsche Hypothkenbank, a subsidiary of NordLB which it is considering selling. In a separate development, the cover pools of Westdeutsche ImmobilienBank (WestImmo) will be fused with those of Aareal Bank.
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Deutsche Hypothekenbank has mandated leads for its first deal of the year, weeks after its owner NordLB said it was considering a sale of the bank. The high quality cover pool and choice of German law as the governing code will stand the deal in good stead, but uncertainty over borrower's future ownership could complicate matters.
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Commerzbank has signalled its intention to formally pull out of the ship Pfandbrief business, while NordLB is considering a sale of Deutsche Hypo to shore up capital after absorbing BremerLB’s loss-making shipping business.
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No deterioration in credit quality has taken place among corporate Schuldschein borrowers since 2008, concludes a new report from Helaba, despite the market having undergone huge expansion.
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The European Union has issued its first ever Schuldschein, and may issue further such deals.
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Finnish packaging firm Huhtamäki closed a heavily oversubscribed dual currency Schuldschein on Monday as opportunities to invest in multiple currencies attract foreign lenders into the market.
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Yorkshire Building Society defied concerns around the UK’s decision to leave the European Union this week, issuing a well oversubscribed covered bond that was very broadly distributed and that priced almost flat to its curve.
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Germany’s WL Bank priced a €250m tap of its 10 year mortgage backed Pfandbrief on Thursday, taking advantage of the squeezed market to price flat to its curve. Cheaper French covered bonds have performed well lately and profit taking was seen in the UK sector.
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CPPIB Capital is looking to step across the Atlantic into euros, selecting four banks to roadshow its euro debut. Elsewhere, the European Financial Stability Facility (EFSF) sent out its first request for proposals for the second quarter.
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WL Bank took advantage of strong funding conditions — and a reverse enquiry — to issue a tightly priced 20 year public sector backed Pfandbrief on Thursday, the longest covered bond from Germany this year. The transaction follows the announcement of plans to merge the cover pools of WL Bank and DG Hyp.
