Germany’s Münchener Hypothekenbank and Denmark’s Nykredit Realkredit will embark upon a joint roadshow in Asia next week, seeking to build on increasing investor and issuer interest in covered bonds in countries such as Singapore with an unusual combined marketing exercise.

While industry bodies such as Germany’s Association of German Pfandbrief Banks (vdp) have held group investor meetings and investment banks have taken groups of national issuers on joint roadshows, it is unusual for issuers from different jurisdictions to engage investors arm in arm.

Supported by DZ Bank and Nykredit Markets, the two European issuers will be visiting Malaysia, Singapore, Korea and Taiwan and for the non-deal roadshow.

“We thought it would be a good idea to take two strong issuers from two strong jurisdictions to go out there together and we teamed up with MünchenerHyp,” said Morten Bækmand Nielsen, head of investor relations at Nykredit Realkredit. “We thought we could leverage having two different issuers from slightly different but still strong jurisdictions, and basically help each other create momentum and interest.

“From what we hear the central banks are coming back into the covered bond space and also some of these sovereign wealth funds,” he added. “We saw the French have a huge take-up, with central banks and official institutions taking up almost half of CFF – there was some Asian bid in there as well and we thought that was interesting. That’s right now, but we have been hearing talk of that kind of thing for a while now.”

Nykredit Realkredit has roadshowed before in Asia, while MünchenerHyp has also been a regular participant in the vdp’s annual Asian roadshows. Rafael Scholz, head of treasury at MünchenerHyp, said that while interest from some areas, such as Japan, is confined to monitoring existing holdings, there is potential in other parts of Asia, particularly with actual or potential domestic issuance raising the profile of covered bonds.

“There is a correlation between the development of a domestic covered bond market and interest in covered bonds in general in the respective country,” he said. “Apart from central banks, which we have previously seen involved in the market, these new investors are mainly focussed on the strongest legislations first.”

The Monetary Authority of Singapore (MAS) established a regulatory framework in January – although this is yet to be taken up by issuers – and in August MAS included covered bonds in proposals for Level 2A of Singaporean Liquidity Coverage Ratio (LCR) requirements, in line with the Basel Committee’s framework. South Korea meanwhile experienced covered bond issuance even before legislation was put in place in April.

The roadshow will kick off in Malaysia at an ASEAN fixed income event at Bank Negara Malaysia, the central bank. Malaysian banks are understood to be showing an interest in covered bonds, with local rating agencies having already set out their preliminary stances towards issuance.