Market Turbulence: trends and challenges for Covered Bond Issuers

With almost EUR200bn of EUR benchmark covered bond gross issuance year-to-date, the covered bond market is set to end 2022 on a record high. 2023 already sounds promising, however, markets will have to deal with a high degree of uncertainty and mounting risks for financial stability. 

While the new regime of inflation, interest and growth rates has significantly impacted the pricing paradigm and market depth in unsecured and subordinated debt markets, covered bonds continue to deliver what they have been designed for: the safest and most cost efficient long-term wholesale funding tool banks have in their arsenal to refinance real estate and public sector assets. 

Meanwhile, concerns surrounding the consequences of climate change and global warming have forced real estate market stakeholders to take drastic measures.

How will covered bond issuers fare in light of this as well as the regulatory response to the environmental challenges?

11.11.2022

Read the Pfandbrief & Sustainability Roundtable write-up Will open in a new tab