Covered Bond & Agency Monitor - From CPT to soft bullet (English version)

  • Covered Bond market telegram: Modest issuance at the long end of the curve at record tight levels continued during last week. Secondary spread wise, Chart 2 on the right suggests slightly softer trading, as the absolute moves of below 0.5bp vs. one week ago are within a normal trading range.
  • SSA market telegram: Supply in the SSA primary market was solid this week, although investor demand for new paper was rather low as a new EU SURE deal is expected next week. In the secondary market, the iBoxx Sub-Sovereigns index widened by 1.2bp on a weekly basis.
  • Aegon switches to soft bullet: Aegon stated in a press release that it has set up a new soft-bullet covered bond program. Any new covered bond issuances are expected to take place under this program, instead of under the (old) conditional pass-through program. The switch to the soft-bullet structure brings a number of advantages for the issuer and follows a recent trend in the Netherlands.
  • North Rhine-Westphalia presents updated sustainability bond framework: Yesterday, the State of North Rhine-Westphalia (NRW) presented its updated sustainability bond framework during a global investor call. A EUR-benchmark transaction is planned to follow shortly.
  • Earnings in brief: The 1Q21 earnings season continues. We provide a brief overview of the results of covered bond issuers. For more details, please refer to the respective Daily Credit Briefing.

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