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Covered bonds and RMBS secured on green mortgage collateral do not deliver issuers much of a saving over conventional issuance in those markets, but favourable regulatory initiatives stand to tip the balance towards an increase in green mortgage production. Secured issuance will be the best way to fund this activity — expect green RMBS and covered bond issuance to surge.
Berlin Hyp’s six year green Pfandbrief and Bawag’s 20 year vanilla covered bond attracted strong demand on Tuesday reflecting the paucity of supply, a steadier rates outlook, the rare tenors on offer and, in Berlin Hyp’s case, the green collateral. At the same time VUB mandated leads for a five year covered bond, the first from Slovakia this year.
Sparebanken Sor Boligkreditt’s covered bond drew more demand than competing deals issued by Berlin Hyp and Royal Bank of Canada on Tuesday, thanks to its more generous spread, the shorter duration and favourable liquidity treatment.
Sparebanken Sor Boligkreditt’s covered bond drew more demand than competing deals issued by Berlin Hyp and Royal Bank of Canada on Tuesday, thanks to its more generous spread, the shorter duration and favourable liquidity treatment.