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IFR Covered Bonds Roundtable 2017

IFR held its Covered Bond roundtable on January 31 with delegates coming together at a strong start to the year for the asset class.

Spreads that had been under a bit of pressure at the end of 2016 are on a tear again, with the already tight getting tighter, demand growing and average deal sizes increasing.

But that’s not to say that the year ahead will be plain sailing and there are a number of factors casting a shadow over the market.

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IFR Covered Bonds Roundtable 2017: Participants

Bodo Winkler Berlin Hyp Bodo Winkler is head of credit treasury and investor relations at Berlin Hyp. He studied at the Lord Ashcroft International Business School in Cambridge and the Berlin School of Economics and Law. Ted Packmohr Commerzbank Ted Packmohr is responsible for financials and covered bonds research at Commerzbank, having joined Dresdner Kleinwort Wasserstein in 1998. He graduated from Julius-Maximilians-University in Wurzburg. Juergen Klebe Deutsche Hypo Juergen Klebe is senior director of funding and investor relations at...

IFR Covered Bonds Roundtable 2017: Part 1

IFR: Welcome everyone, and thank you in particular to vdp for sponsoring this event. To open the discussion, let’s talk about the issuance trends we’ve seen so far this year. It has been a very strong start to the year, volume wise: I think we have seen €25.5bn issued so far. What are the market dynamics that are making it so favourable right now? And what have we seen in terms of trends? Ralf Grossmann, head of covered bond origination at Societe Generale: It has indeed been quite a nice start of the year, which is usual for January in...

IFR Covered Bonds Roundtable 2017: Part 2

IFR: We have touched on pricing dynamics but it would be good to go into a bit more detail. You seem to agree we are unlikely to get back to levels we saw early last year, but is pricing attractive at current levels? And how do different regions compare? Is Germany still relatively keenly priced? Bodo Winkler, Berlin Hyp: Since the ECB programme has been in place the pricing from different jurisdictions converged continuously. German Pfandbriefe had the worst performance of all because they already had the tightest spreads before and then the...

IFR Covered Bonds Roundtable 2017: Part 3

IFR: From a rating agency perspective, how do you look at this new style senior debt coming in? Is this new layer that is being built a good thing for covered bonds? Martin Lenhard, Moody’s: That’s not exactly my area of expertise because it’s our bank rating method that’s affected. In our bank rating method we look at the liability structure of the bank balance sheet, and assess the support that is provided to the more senior tranches in that liability structure. That’s why we have different ratings depending on the type and thickness of the...