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COVID-19: Impact and outlook for Covered Bonds

The current pandemic and its profound effects on covered bonds and the Pfandbrief in particular, explored by Helaba Capital markets expert Thomas Cohrs.

Effects of the pandemic


The current pandemic has had a profound direct and indirect effect on the EUR capital markets:

  • First, the sudden burst of widespread economic uncertainty propelled the secondary market spreads of bank securities sky-high within only a couple of weeks.

  • Then the firm resolve and coordinated efforts of the world’s central banks and later its governments succeeded in pushing spreads back to and sometimes even below the levels last seen before the “official” start of the pandemic.

  • In the process, the issue of covered bonds dwindled to a trickle and even disappeared altogether for a few weeks in the second quarter. 

  • Towards the end of June, the primary market for covered bonds began to resurface, however, its volumes remain far behind those seen during the comparable periods of recent years.

Our podcast with ICMA there­fore focused on analyzing the reasons and potential con­sequences of these develop­ments for the covered bond in general and the Pfandbrief in particular.


Podcast ICMA: COVID-19 - Impact and outlook for Covered Bonds

by Helaba experts Thomas Cohrs,  FIG and SSA Origination, Syndicate & Sales and Sabrina Miehs, Covered Bond Analyst and others


Government induced issuance of and investment in securities has largely displaced covered bond issuance in regular markets at a time when the instrument had been on a decade long winning streak as funding and investment instrument of choice for banks and other financial institutions across Europe, parts of North America and even the Asian-Pacific region. Like many of our peers in Germany and abroad, Helaba has recently preferred direct ECB funding over capital markets issuance given the tremendous cost advantages this has entailed.

The Helaba approach


This cost consciousness notwithstanding, Helaba greatly believes in the Pfandbrief’s and other covered bonds’ bright future and continues to build its relevant franchise accordingly. While deeply rooted in the German savings bank sector, Helaba remains a major issuer of and investor in EUR covered bonds and aims to be one of the top providers of underwriting, distribution and trading services in this asset class.

„Helaba greatly believes in the Pfand­brief’s and other covered bonds’ bright future and continues to build its relevant franchise. We remain a major issuer of and investor in EUR covered bonds."

Thomas Cohrs,
Financial Institutions

Thomas Cohrs, Financial Institutions
Thomas Cohrs, Financial Institutions

Capital Markets

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