Commentary

Spanish Mortgage Covered Bonds: Cover Pools Stability Amid an Uptick in Issuance

Covered Bonds

Summary

During the first three quarters of 2023, Spanish mortgage cover pools remained fairly stable with issuers maintaining high overcollateralisation (OC) levels in their programmes, while house prices continue to rise, but at a slower pace. In terms of issuance, Spanish banks were very active in Q1 2023 but have hardly issued since.

In this commentary, DBRS Morningstar examines the behaviour of the Spanish mortgage covered bond market during 2023 and our expectations for cover pool performance, house prices and issuance activity for 2024.