Deutsche Bank: CIBC "Not a Kick-off of USD Covered Bonds Yet"

The "Canada" section of Deutsche Bank's new 142-page Market Guide on covered bonds (Feb. 8) includes a paragraph on last month's $2 billion issuance of U.S. dollar-denominated covered bonds by Canadian Imperial Bank of Commerce (CIBC).

As we have noted previously, the CIBC issue priced at 30 basis points over mid-swaps.  In the secondary market, pricing in the secondary market tightened to 18 basis points over mid-swaps in the first week, according to Deutsche Bank.

While highlighting that this was the "first post-crisis USD covered bond sold to U.S. investors," Market Guide author Bernd Volk is cautious about the CIBC issue's significance.  He writes:

"Given that CIBC is a 4 times AAA covered bond and has state guaranteed mortgages in the cover pool, in our view, this is not a kick-off of USD covered bonds yet."