State-owned VakifBank broke new ground with its €500m five-year covered bond towards the end of April. The best part of 10 years of wrangling over the product was wrapped up in the deal, which made it notable from an issuer point of view. As far as investors were concerned, it printed at a spread that offered considerable pick-up over anything else available in the asset class. Unlike peripheral eurozone banks, Vakif's covered bonds are not eligible for the European Central Bank's bond-buying programme, which meant the issuer was forced to offer the chunky premium.
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