---
title: "SSA and Financials: Weekly Market Update"
url: https://www.helaba.com/en/ssa-and-financials-weekly-market-update-41
type: dd_research
language: en
updated: 2026-09-28
keywords: Renten, Weekly Market Update_englisch
---

# SSA and Financials: Weekly Market Update

Focus on: SSA & Financials 14 July 2022 © Helaba | Research & Advisory | 14 July 2022 1 of 7 Research & Advisory Weekly Market Update Primary market environment: The general conditions have changed little recently. Market vola- tility remains high for many assets. In view of the fact that prices are continuing to rise in many places, fears of inflation persist. It remains to be seen to what extent the ECB's interest rate de- cision next week will ease the situation. As in the recent past, financial market participants continue to prefer the risk-off mode. The play of colours of our spread indicator underpins this impressively. Major points of interest during the banks’ ongoing reporting season could be both the economic outlook and the interest rate environment. Primary market barometer Sources: Helaba Research & Advisory The SSA segment is still in vogue, es- pecially as the search for security continues and the attractiveness vs. Bunds endures. Not surprisingly, the EU was again successful in placing a dual tranche. As usual, demand clearly outstripped supply. Covered bond spreads are likely to trend sideways in the near future. Market participants are increasingly taking their leave for the summer break, the ECB's reinvestment policy is continuing and demand from end investors is weakening. The primary market for senior unse- cured bank bonds has ground to a halt. The difficult market environ- ment is compounded by the blackout period due to the reporting season for Q2 2022 and the upcoming sum- mer break. Covered Bonds Senior Unsecured SSA Risk aversion still dominates Spread trend indicator\*, ASWspread change versus … \*ASW levels standardized and 2T-smoothed, since 14.2.22 changed calculation of ASW levels by Markit. Sources: Refinitiv, Helaba Research & Advisory IBOXX EURO 1 day 1 week 4 week 13 weeks 52 weeks 104 weeks Germany 0,05 0,10 -0,53 -0,47 -2,63 -3,40 European Union 0,07 0,39 -0,06 0,80 0,15 -0,28 Germany Covered 0,12 0,51 0,53 0,65 0,65 -0,27 EU Covered 0,03 0,12 0,15 0,21 0,24 -0,02 Banks senior preferred 0,09 -0,50 -0,07 1,81 2,26 0,70 Banks senior bail-in (SNP) 0,13 -0,44 -0,09 1,60 2,29 0,67 Banks subordinated 0,02 -0,13 0,34 1,50 2,09 0,83 Supranational 0,07 0,34 0,07 0,70 0,10 -0,09 Agencies 0,04 0,12 -0,06 0,13 -0,67 -0,97 Sub-Sovereigns Germany 0,09 0,31 0,23 0,02 -0,91 -1,33 Sub-Sovereigns 0,09 0,30 0,27 0,53 -0,23 -0,91 strong middle weak unchanged weak middle strong spread widening spread tightening Focus on: SSA & Financials – Weekly Market Update © Helaba | Research & Advisory | 14 July 2022 2 of 7 SSA The SSA segment continues to exert a certain attraction at present. The reasons for this are obvious: safe investments coupled with a yield advantage over Bunds are attractive for investors. However, it is important to take a closer look at this week's new issues. The EU's dual tranche, a new issue of EUR 5 billion and a tap of the tranche maturing in 2041, was oversubscribed by 6.6 and 9.3 times, respectively, and tightened by 2 bps compared to the initial spread target. The spread premium vs. EU Bunds Dec. 2029 was approx. 81 bp. The deal of the Asian Development Bank, on the other hand, went through with somewhat more difficulty: on the one hand, a new issue premium of 6 bp had to be accepted, and on the other hand, no tightening took place. All in all, the relevant spreads vs. mid-swap continue to trade at historically narrow levels, while the spread over govern- ment bonds is exceptionally high. Outlook: The relatively low turnover due to the summer holidays is likely to con- tinue until the end of August. In addition, the upcoming ECB meeting is likely to cast its shadow. If at all, issuing activity can probably only be expected on Monday or Tuesday. Covered Bonds After a relatively dynamic first half-year, the momentum on the primary market is currently noticea- bly waning. This should not be attributed solely to the summer break. In the run-up to the harmoni- sation of EU regulations for covered bonds, which came into force on 8 July, there were pull-forward effects. Just in time before the deadline, Spain, where there was a great need for adjustment, managed to implement the di- rective. Initial assessments by the rating agencies of the country's new legal framework tend to be positive, so there should be room for a rating improvement in the future. In addition to harmonisation, the recent increase in refinancing costs has also led to pull-forward effects. However, a lower volume of new issues does not necessarily have to be a disadvantage. The markets are currently benefiting from this, spreads are declining somewhat. Two covered bonds were issued this week: On the one hand, Dekabank came out with a sub-benchmark (see trader quote), on the other hand, Korea Housing entered the primary market stage (4Y, 500 m at +40). The latter led to repricing in the last two days. Despite a defensive maturity of 4 years, an ESG-compliant use of funds and a spread premium of 40 bps over mid-swap fixed from the opening of the book, KHFC was unable to develop any order book momentum and achieved only a wafer-thin oversubscription of the targeted issue volume at the close of the book. The new issue premium here is in the double-digit range between 10 and 15 bp. It should also be noted that in the week ending 8 July, the bond holdings of the Eurosystem central banks under APP and PEPP were reduced more significantly by EUR 6.6 billion than before (EUR 0.2 billion). Meanwhile, the covered bond holdings were further increased by EUR 285 million. Outlook: Due to the summer break, fewer new issues are expected in the coming weeks. Accordingly, covered bond spreads should tend to move sideways. Coupon Issuer Rating (M/S&P/F) Volume € Tap Maturity Launch-Spread vs. Mid-Swaps ESG Launch Orderbook 1st Spread- Indication 1,625% EU Aaa /AA/AAA 5,000bn 04.12.2029 ms -11 bps 12.07.2022 33,000bn ms - 9 area 0,450% EU Aaa /AA/AAA 3,000bn  04.07.2041 ms +24 bps 12.07.2022 28,000bn ms + 26 area 1,625% Eurofima Aa2 /AA/- 0,500bn 20.07.2027 ms +8 bps  13.07.2022 0,800bn ms + 10 area Sources: Bloomberg, Helaba DCM €-SSA-Issues week of 11 July 2022 " We are seeing a certain calming on the secondary market this week. The spreads of covered bonds from the core countries are stabilising and even longer maturities are finding occasional buyers again. This can be seen well in the recently raised 15Y Dt. Bank, which came in at +24 and is now trading +20/+18. The only Ger- man issue this week, the Dekabank 10Y at +9, was also very well received and is now trading a good basis point tighter." Assessments from the Helaba trading room Focus on: SSA & Financials – Weekly Market Update © Helaba | Research & Advisory | 14 July 2022 3 of 7 Senior Unsecured There are still almost no transactions on the primary market for senior unsecured bank bonds. The extremely volatile market environ- ment determined by recession fears is weighing on the market. In particular, concerns about future gas supplies from Russia following the maintenance of the Nord Stream 1 pipeline dominate the headlines. The news from Spain on Tuesday that an additional levy for banks (and energy companies) is planned there for the next two years also weighed on sentiment. On top of that, there is the beginning of the vacation season and the blackout period due to the ongoing reporting for the 2nd quarter of 2022. Outlook: Most banks have not yet completed their issuance plans for this year. In the current market environment, they are postponing planned transactions and hoping for an easing after the vacations in September. In the up- coming week, it will be particularly tense on Thursday, when the ECB decides on its interest rate steps and the maintenance work on Nord Stream 1 is expected to be completed, thus showing whether or to what extent gas de- liveries from Russia will resume. Furthermore, the Q2 2022 bank reporting season is getting into full swing, so we will get their assessment of how the changed economic environment will be reflected in bank balance sheets. Overall, in line with our expectation, no significant pickup in the primary market is expected in the senior unse- cured segment next week. Coupon Issuer Rating (M/S&P/F) Volume € Tap Maturity Launch-Spread vs. Mid-Swaps ESG Launch Orderbook 1st Spread- Indication 2,125% Dekabank Aaa /-/- 0,250bn 19.07.2032 ms +9 bps 11.07.2022 0,600bn ms + 13 area 1,963% Korea Housing Finance Corporation - /AAA/- 0,500bn 19.07.2026 ms +40 bps 11.07.2022 0,560bn ms + 40 bp # Sources: Bloomberg, Helaba DCM €-Covered Bond-Issues week of 11 July 2022 Coupon Issuer Rating (M/S&P/F) Volume € Tap Maturity Launch-Spread vs. Mid-Swaps ESG Launch Orderbook 1st Spread- Indication 6,000% Nova Ljubljanska banka d.d. - /BBB/- 0,300bn 19.07.2025 ms +483 bps 12.07.2022 0,390bn 6% area Sources: Bloomberg, Helaba DCM €-Senior Preferred-Issues week of 11 July 2022 Coupon Issuer Rating (M/S&P/F) Volume € Tap Maturity Launch-Spread vs. Mid-Swaps ESG Launch Orderbook 1st Spread- Indication 2,750% UBS Group AG - /A-/A+ 1,000bn 15.06.2027 ms +115 bps 07.06.2022 1,900bn ms + 130-135 bp Sources: Bloomberg, Helaba DCM €-Senior Non-Preferred-Issues week of 11 July 2022 "Recession fears and signs are becoming more entrenched, causing the markets to react in a very tense man- ner. The iTraxx indices narrowed on a weekly basis due to the bear market rally. However, the last few days with the clouding sentiment widening again. The trading desks of the banks drive low risk before the summer, which could be seen in the spread rally driven by illiquidity." Assessments from the Helaba trading room Example Sweden: Mortgage rates driven upwards by rising funding costs Monthly average 5Y new lending mortgage rates, % \*Peers: Swedbank, Handelsbanken, Nordea, SBAB, Länsförsäkringar Quellen: SEB, Helaba Research & Advisory Focus on: SSA & Financials – Weekly Market Update © Helaba | Research & Advisory | 14 July 2022 4 of 7 Short news 7/13 Bank recovery and resolution management: The European Union's Single Resolution Board, the authority that deals with failing banks, will ramp up pressure on lenders to boost their capital levels so that none of them will remain "too big to fail" by January 2024, Reuters reported. 7/13 Covered Bonds/Regulatory treatment: European covered bonds will have to comply with the legislative package harmonising the EU covered bond framework (EU Covered Bond Directive and updated Article 129 of the Capital Requirements Regulation \[CRR\]) from 8 July 2022 or risk losing their preferential regulatory treatment, according to S&P. 7/13 Bleak earnings outlook for cooperative banks: Germany's cooperative banks expect worse results this year compared to 2021, when they made a cumulative pretax profit of €10.5 billion, mainly due to the rise in interest rates and the weakening economy, Handelsblatt wrote, citing Andreas Martin, board member of the Association of German Volksbanken and Raiffeisenbanken. 7/13 Spain with new tax on banks: Spain will impose new taxes on large banks and energy companies to fund pol- icies to ease the impact of record inflation on consumers as reported by Bloomberg. The levies on both financial institutions and energy firms will last for two years. 7/12 ECB survey on possible gas supply freeze: According to the Börsen-Zeitung, the ECB has asked major banks to analyze the impact of a gas supply freeze on their loan portfolios. 7/11 EU-Taxonomy/Minimum Safeguards: The Platform o Sustainable Finance seeks public feedback on its draft report on minimum safeguards until 22 August. The minimum safeguards set out in Article 18 of the Taxonomy Regulation require that companies implement procedures to comply with OECD Guidelines for multinational en- terprises and theUN guiding principles on business and human rights. The Publisher report aims to provide ad- vice on how compliance with minimum safeguards could be assessed. The Platform’s advice will feed into Commis- sion work on the usability of the EU Taxonomy. 6/8 Climate stress test: The ECB supervisory authority has presented the results of the climate stress test. Un- surprisingly, despite the progress made, it criticizes extensive shortcomings in the implementation of climate stress tests (see our publication “European banks: Climate risk stress test highlights need for further action” dated 11 July 2022). Bank Date Wells Fargo 07/15 Citigroup 07/15 Svenska Handelsbanken 07/15 Bank of America 07/18 Goldman Sachs Group 07/18 Nordea Bank 07/18 Swedbank 07/19 BAWAG Group 07/21 Bankinter 07/21 Sources: Bloomberg, Helaba Research & Advisory Reporting dates of selected banks Focus on: SSA & Financials – Weekly Market Update © Helaba | Research & Advisory | 14 July 2022 5 of 7 \* Closing prices from the previous day Sources: Refinitiv, Helaba Research & Advisory, \* ASW-Spreads Market Data (current\*, vs. 1 week, vs. 4 weeks) E-STOXX 600 Banken 121 0,98% -6,63% iBoxx € Cov. Germany\* 7,0 5,4 7,2 iTraxx Senior Financial 128,8 -2,2 9,6 10J-Rendite 1,15 -0,01 -0,50 iBoxx € Cov. Bonds\* 15,0 5,6 8,2 iBoxx € Supranational 5,8 5,75 4,01 Swap 10J 1,96 -0,05 -0,49 iBoxx € Banks PS 87,1 -8,2 3,0 iBoxx € Agencies -10,7 3,59 3,29 iBoxx € Germany -73,4 1,99 -3,06 iBoxx Banks NPS 129,3 -9,2 2,9 iBoxx € Sub-Sov. Germany 6,7 6,10 6,58 iBoxx € EU 5,5 6,21 2,81 iBoxx Banks Subordinated 241,9 -7,6 25,6 iBoxx € Sub-Sovereign 20,6 5,37 6,75 Leisure tip for the weekend: DomStufen Festival in Erfurt Do you have ideas for leisure tips? We would be happy to receive your suggestions at research@helaba.de. Source: https://www.domstufen-festspiele.de/ Every summer, Erfurt hosts the DomStufen Festival. The 70 steps of the his- toric cathedral and the Severi Church are transformed into an opera and musi- cal stage. This year, visitors can look forward to the opera Nabucco by Verdi. Located in the middle of Erfurt's historic city center, the festival has been at- tracting hundreds of thousands of visitors from many countries around the world for years. From July 15, 2022 to August 07, 2022, a number of other productions and world premieres will be staged. The schedule can be viewed via the link below. Helaba has been a major sponsor since 1994. More information: DomStufen Festival GlobalCapital Covered Bond Awards 2022 Take part in the voting for this year's "Global Capital Covered Bond Awards" by 5 August! Votes for Helaba in the categories "Deal of the Year" and "Best Bank for Distribution" via this link would be very much appreciated. Focus on: SSA & Financials – Weekly Market Update © Helaba | Research & Advisory | 14 July 2022 6 of 7 Chartbook SSA, Covered Bonds, Senior Unsecured SSA: Primary volumes SSA: Spread development EUR benchmark issue volume cumulative by weeks, bn EUR ASW in bp Sources: Bloomberg, Helaba Research & Advisory Sources: Bloomberg, Helaba Research & Advisory 0 50 100 150 200 250 300 350 400 0 50 100 150 200 250 300 350 400 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 2020 2021 2022 -4 -2 0 2 4 6 8 10 12 14 -4 -2 0 2 4 6 8 10 12 14 Jul.21 Sep.21 Nov.21 Jan.22 Mrz.22 Mai.22 Jul.22 EUR Covered Covered Germany Covered Primary volumes Covered Bonds: Spread development EUR benchmark issue volume cumulative by weeks, bn EUR ASW in bp Sources: Bloomberg, Helaba Research & Advisory Sources: Bloomberg, Helaba Research & Advisory 0 20 40 60 80 100 120 140 0 20 40 60 80 100 120 140 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 2022 2020 2021 0 50 100 150 200 250 300 0 50 100 150 200 250 300 Jul.21 Sep.21 Nov.21 Jan.22 Mrz.22 Mai.22 Jul.22 Banks Subordinated Banks Senior Bail-in Banks Senior Preferred Senior Primary volumes Senior Unsecured: Spread development EUR benchmark issue volume cumulative by weeks, bn EUR ASW spread in bp Sources: Bloomberg, Helaba Research & Advisory Sources: Bloomberg, Helaba Research & Advisory 0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 2021 SP 2020 SP 2022 SP 2020 SNP 2021 SNP 2022 SNP 0 50 100 150 200 250 300 0 50 100 150 200 250 300 Jul.21 Sep.21 Nov.21 Jan.22 Mrz.22 Mai.22 Jul.22 Banks Subordinated Banks Senior Bail-in Banks Senior Preferred Focus on: SSA & Financials – Weekly Market Update © Helaba | Research & Advisory | 14 July 2022 7 of 7 News from Research & Advisory  FOCUS ON: CREDITS – PRIMARY MARKET UPDATE EUR BENCHMARK BANK BONDS: Q2 2022  FOCUS ON: CREDITS – EUROPEAN BANKS: CLIMATE RISK STRESS TEST HIGHLIGHTS NEED FOR FURHTER ACTION  EUR CORPORATE BONDS: PRIMARY MARKET Q2 2022  EUROPEAN BANKS: ACTIVITIES BECOMING EVER GREENER  FOCUS ON: CREDITS - EUROPEAN BANKS: WAR IN UKRAINE CLOUDS OUTLOOK  IMPLEMENTATION OF THE EU COVERED BOND DIRECTIVE: SPAIN VERSUS FRANCE AND GERMANY (VIDEO)  IMPLEMENTATION OF THE EU COVERED BOND DIRECTIVE – STATE OF PLAY: AUSTRIA VERSUS FRANCE AND GERMANY (VIDEO)  IMPLEMENTATION OF THE EU COVERED BOND DIRECTIVE – STATE OF PLAY IN FRANCE AND GERMANY (VIDEO)  COVERED-BOND-LAWS: IMPLEMENTATION OF THE EU REGULATION (VIDEO) Team of authors Publisher and editorial office Helaba Research & Advisory Editor: Sabrina Miehs, CESGA Corporate Research & Advisory Responsible: Dr. Gertrud R. Traud Chefvolkswirtin/ Head of Research & Advisory Neue Mainzer Str. 52-58 60311 Frankfurt am Main T +49 69 / 91 32 - 20 Internet: www.helaba.com Disclaimer This publication has been prepared with the greatest care. However, it contains only non-binding analyses and forecasts of current and future market conditions. The information is based on sources which we consider to be reliable, but for whose accuracy, completeness or up-to-dateness we cannot assume any liability. All state- ments made in this publication are for information purposes only. They must not be understood as an offer or recommendation for investment de- cisions. Here you can subscribe to our newsletter: https://news.helaba.de/research/ Dr. Susanne Knips Senior Credit Analyst T 069/91 32-32 11 Sabrina Miehs, CESGA Head of FI & SSA Research Senior Advisor Sustainable Finance T 069/91 32-48 90 Christian Schmidt Covered Bond & SSA Analyst T 069/91 32-23 88

SSA segment continues to be attractive. Covered bonds: momentum on primary market is lost. Senior Unsecured: Continues to be inactive