The Netherlands
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Lower overcollateralisation (OC), tighter spreads and access to the ultra-long end of the curve are likely to cause some Dutch covered bond banks to reconsider whether it is still viable to issue conditional pass through (CPT) deals or follow NN Bank, which recently switched from to soft bullet issuance. -
Conditions in the primary FIG bond market have improved of late, tempting European issuers to bring subordinated trades. Rabobank made an appearance this week, adding to a flurry of trades in the format.
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FMO began a series of investor calls on Monday to market a rare tier two bond issue ahead of a call date of a previous deal in the format in December.
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NRW.Bank’s inaugural social bond sparked a flurry of 15 year trades this week as a flattening French curve and the positive yields on offer helped spur on demand, with three issuers opting to follow the German agency’s successful trip to the maturity on Wednesday.
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The 15 year tenor is the flavour of the week in the SSA market. Three issuers have mandated for deals at the tenor so far, following on from NRW.Bank’s successful trip to the maturity on Tuesday.
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NRW.Bank signalled to the market that there is demand at 15 years with its inaugural social bond on Tuesday. Following the deal two other European issuers, Bank Nederlandse Gemeenten and Portugal, mandated for deals of their own in the tenor.
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NN Bank used a quiet market this week to launch the first deal from its new soft bullet covered bond programme. The inaugural deal carried an ‘attractive’ spread and was more than three times subscribed at final terms.
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NN Bank unveiled plans on Monday to issue its first covered bond from its newly published soft-bullet programme. At the same time, Berlin Hyp has mandated lead managers for the sale of a new green covered bond.
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Issuers are struggling to obtain the necessary internal approvals to issue covered bonds, given how expensive the instruments are compared to the European Central Bank's Targeted Longer Term Refinancing Operations (TLTRO III).
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Coöperatieve Rabobank launched a 10 year covered bond at a spread of 7bp over mid-swaps this week, leaving a small new issue concession for investors. The deal also underlined the recent recovery of credit spreads amid the coronavirus pandemic.
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Stephan Gimpel is leaving Citi to pursue an opportunity in fintech, after 14 years in the US bank’s debt capital markets business.
