European Banks in Deposits Tussle Rush to Sell Ultra-Safe Debt
- Pressure on deposits, TLTRO repayments fuel record bond sales
- Covered bond sales to hit €200 billion in 2023, analysts say
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European banks locked in an increasingly fierce tussle with governments over customer deposits look set to crank up their issuance of ultra-safe mortgage-backed debt as they seek a cheap source of funds.
Issuance of covered bonds, a type of euro-denominated debt collateralized against an underlying pool of a bank’s assets such as mortgages, has already hit €166 billion ($177 billion) this year, on track to surpass last year’s record of €207 billion.