Work is underway on pooled covered bond issuance in Austria, according to panellists at an ECBC plenary in Vienna yesterday (Wednesday), with one declaring himself “very bullish” in connection with one such project that is being prepared by several Hypo banks.

Panel moderator Florian Eichert, senior covered bond analyst at Crédit Agricole, opened the panel by noting that Austria was a relatively small market with some smaller issuers, and that pooling has been seen as an advantageous way for such credits to access covered bond funding, notably in Spain through multi-cédulas but also through joint issuance in other countries.

Alexander Boor, head of ALM at Hypo Landesbank Vorarlberg, said that he is “very bullish” on pooling in the Hypo sector of the Austrian banking industry, with five of the 10 members of the Verband der österreichischen Landes-Hypothekenbanken (Hypo Verband) are working on a project to this end.

The Austrian Landes-Hypothekenbanken have already had a joint entity in place, Pfandbriefstelle der österreichischen Landes-Hypothekenbanken, of which the institutions are members and which was founded in 1939. According to Bohr this is being renamed Pfandbriefbank and would be the entity through which the sector would pool issuance.

Eichert noted that pooled issuance could further detract from the already limited amounts that smaller institutions can issue, but Bohr said that pooled issuance offers more comfort with regards to funding. He noted that Hypo Landesbank Vorarlberg has some Eu1.3bn of unused capacity in its mortgage cover pool that could be utilised in pooled issuance.

Katarzyna Kappeller, a representative of the Austrian Covered Bond & Pfandbrief Forum and head of asset-liability management at Raiffeisen Bank International (RBI), said that the idea was also being explored in the Raiffeisen banking sector.