reports
- Hendrik Wiersma
- Jeroen van den Broek
- Nadège Tillier
- Suvi Platerink Kosonen
- Hendrik Wiersma
- Jeroen van den Broek
- Maureen Schuller
- Nadège Tillier
- Suvi Platerink Kosonen
- Hendrik Wiersma
- Jeroen van den Broek
- Maureen Schuller
- Nadège Tillier
- Suvi Platerink Kosonen
Bite Size Strategy/The case for flattening, expect more tightening
As we edge ever closer to the ECB meeting next Wednesday, the perfect funding environment has tempted many issuers out of the summer snooze to lock in historically low yields. Our economists expect a depo cut to -0.6%, TLTRO tiering and an announcement for APP to the tune of €30bn, we believe up to €10bn could be in the form of their beloved private sector CSPP (c.€6bn/ month corporate) which could well include senior preferred banking debt (for another €3-4bn). In this light, naturally,...
- Antoine Bouvet
- Benjamin Schroeder
- Maureen Schuller
Govie, SSA & Covered Supply/September details and 2019 overview
EZ govie supply may top €70bn in September after dropping to €39bn last month. Net flow of funds is will turn negative amid larger redemption/coupon flows. €-SSA issuance should also resume with ESM, EIB and KFW expected to return. High USD covered redemptions and negative EUR yields to support USD supply.
- Maureen Schuller
Green covered bonds/Weathering the technical screening criteria
The EU taxonomy will have implications for the green (covered) bond market that will likely stretch beyond the EU. In terms of detail, existing green bond frameworks seem better positioned to meet the technical screening criteria than the additional “do no significant harm†criteria or social safeguards.
- Suvi Platerink Kosonen
NIBC/Stable earnings, but the TRIM to hit its capital ratios. NIBCAP2 ...
NIBC reported stable earnings, but its capital ratios will be hit by the ECB TRIM exercise. While NIBC has substantially improved its credit metrics over the last couple of years, especially its corporate book is exposed to a weakening of the economic outlook. NIBC may revisit markets with another non-preferred bond, a risk to the secondary spread performance of the NIBCAP2 4/24. We see value in the shorter end of its preferred curve.
- Hendrik Wiersma
- Jeroen van den Broek
- Maureen Schuller
- Nadège Tillier
- Suvi Platerink Kosonen
Bite Size Strategy/Still in the value zone - with corrected e-mail cov...
We remain bullish after seeing considerable widening earlier in August creating value with an impending CSPP2 just around the corner. Spreads started to tighten slightly last week and we see curves beginning to flatten. However, as we steer towards a generally busy supply month, and with ever more negative yields, we will see the majority of new issuance target the longer end of the curve, as positive yields drive demand. All in all, supply pressure will fail to stop the CSPP2 squeeze. $ credit ...
- Hendrik Wiersma
- Jeroen van den Broek
- Maureen Schuller
- Nadège Tillier
- Suvi Platerink Kosonen
Bite Size Strategy/Still in the value zone
We remain bullish after seeing considerable widening earlier in August creating value with an impending CSPP2 just around the corner. Spreads started to tighten slightly last week and we see curves beginning to flatten. However, as we steer towards a generally busy supply month, and with ever more negative yields, we will see the majority of new issuance target the longer end of the curve, as positive yields drive demand. All in all, supply pressure will fail to stop the CSPP2 squeeze. $ credit ...
- Maureen Schuller
What's up in Covered Bonds/Covereds to be less important in a new APP
• The ECB is broadly anticipated to announce the restart of its asset purchase programme on 12 September. This would likely include fresh net purchases under all previous programmes, including covered bonds. The central bank is looking into alternatives to extend the scope of its asset purchase programme, particularly in light of the fact that in some countries the PSPP is already close to its issuer share restrictions. This may include a loosening of the capital key restrictions or issuer lim...
- Maureen Schuller
What's up in Covered Bonds/Non EZ names dominate pipeline ahead of ECB
• Primary market activity in the EUR covered segment remains subdued in the second half of August, with this week's 3yr €1bn Berlin Hyp transaction the only covered bond priced thus far this month in EUR. The slower summer period offers the most obvious explanation, even though banks already issued €2.25bn in the same week last year. Another explanation is the upcoming ECB meeting on 12 September. • The ECB is already widely expected to cut its deposit rate next month by (at least) 10bp...
- Maureen Schuller
What's up in Covered Bonds/Negative primary yields to become more comm...
• Currently, in most jurisdictions, covered bonds are quoted at negative yield levels across the full curve. Only some of the Southern European countries, non-EU markets or certain core Eurozone names with bonds outstanding in the 17yr maturity bucket or longer have bonds left trading at a positive yield to maturity. Hence, for banks, the options to print covered bonds at positive yield levels in primary are becoming exceptionally scarce if not impossible. After all underlying mortgage loan fe...
- Hendrik Wiersma
- Jeroen van den Broek
- Job Veenendaal
- Nadège Tillier
- Suvi Platerink Kosonen
- Hendrik Wiersma
- Jeroen van den Broek
- Job Veenendaal
- Nadège Tillier
- Suvi Platerink Kosonen
- Suvi Platerink Kosonen
Benelux Bank Green Bonds/Looking for green value
Benelux issuers were the first banks to print euro-denominated green senior unsecured bonds in 2015. Since then the Benelux bank green bond universe has grown to €6bn, with €1,250m issued in 2019 to date. We expect both new issuers and repeat issuers to support the growth of the green bond market. We see value in ABN AMRO green 25s, while the green KBC trades at very tight levels limiting performance potential. The green LeasePlan offers value vs green comps.
- Hendrik Wiersma
- Jeroen van den Broek
- Job Veenendaal
- Nadège Tillier
- Suvi Platerink Kosonen
- Hendrik Wiersma
- Jeroen van den Broek
- Job Veenendaal
- Nadège Tillier
- Suvi Platerink Kosonen
- Hendrik Wiersma
- Jeroen van den Broek
- Job Veenendaal
- Maureen Schuller
- Nadège Tillier
- Suvi Platerink Kosonen
- Hendrik Wiersma
- Jeroen van den Broek
- Job Veenendaal
- Nadège Tillier
- Suvi Platerink Kosonen
- Maureen Schuller
What's up in Covered Bonds/More flattening potential for Kutxabank
Spanish covered bonds have been the strongest performers this year after Italian covered bonds. Spreads have tightened by 21bp this year, supported by among others the tightening of Spanish sovereign spreads, net negative covered bond supply and the announcements by the ECB of a new round of TLTROs while keeping interest rates at low levels for a longer period of time than previously anticipated.
- Marcel Klok
- Maureen Schuller
- Philippe Ledent
- Suvi Platerink Kosonen
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