Covered Bond Issuance Surges in Europe as Borrowing Costs Fall
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Unione di Banche Italiane SCPA and Commerzbank AG are among lenders marketing a total of 4.25 billion euros ($5.8 billion) of covered bonds in Europe today, boosting monthly sales of the debt to the most since July 2012 as borrowing costs approach a record low.
The Italian lender issued 1 billion euros of securities backed by mortgages while Germany’s second-largest bank sold 500 million euros of notes backed by public sector loans, according to data compiled by Bloomberg. The average yield on euro-denominated covered bonds fell 19 basis points this month to 1.4 percent, four basis points from a record low reached May 17, according to Bank of America Merrill Lynch index data.