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2022/12/06 / Erste Group Research

Covered Bond Outlook 2023

The covered bond market saw a new record volume of new issues this year. For 2023, we expect issuance activity to be above average as well, although the volume is likely to be somewhat below this year's record at an estimated EUR 180-190bn.

For the coming year, economic development, a progressive withdrawal of the ECB and covered bond supply should be the main factors influencing covered bond spreads. We expect the previous trend of wider covered bond swap spreads to continue in the coming year, although not necessarily with the same momentum.

Based on the strong price increases of recent years, we believe that the European residential real estate market may see a correction in residential real estate prices in the individual countries. In the event of a normalization at a price level similar to that before the Corona pandemic, there would not necessarily be a sharp rise in loan defaults, especially if there is no sharp downturn in the currently still stable labor market.

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General information

AuthorErste Group Research
Date2022/12/06
Languageen
Product nameCredit News
Topic in focusCredits/ Corporate bonds
Economy in focusAustria, Eurozone
Currency in focusEuro
Sector in focus-
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