F van Lanschot Bankiers is set to enter the covered bond market with the establishment of a legislative conditional pass-through programme, following in the footsteps of CPT pioneer and fellow Dutch issuer NIBC, and with its plans emerging a week after UniCredit debuted in the structure.

The Dutch bank is putting the finishing touches to a Eu5bn programme it jointly arranged with Rabobank and published the prospectus on its website yesterday (Tuesday).

It has launched a first, Eu1m bond off the programme, which was assigned a rating of AAA by Standard & Poor’s yesterday, with the rating a pre-condition of registration of the programme with the Dutch central bank – NIBC did likewise ahead of its first benchmark in October 2013.

“F van Lanschot Bankiers is making this first private issuance while seeking to register the programme with De Nederlandsche Bank, the Dutch central bank,” said S&P. “We understand that the bank will issue public covered bonds under the programme once it has been registered.”

S&P rates the issuer BBB+ while Fitch rates it A-.

Van Lanschot could now become only the third financial institution to issue benchmark conditional pass-through (CPT) covered bonds within a legislative framework after NIBC and Italy’s UniCredit – Germany’s Commerzbank also used a CPT structure for its structured SME-backed covered bond programme. Unlike its peers, van Lanschot has not previously issued covered bonds.

“CPT covered bonds are a nice addition to the bank’s funding mix, as it gives the bank access to a relatively cheap funding source,” said Ruben van Leeuwen, senior ABS and covered bond analyst at Rabobank, who noted that the bank also makes use of RMBS and senior unsecured bonds in its funding. “It faces nearby redemptions of two (Citadel) RMBS transactions, and according to the issuer, the refinancing on these deals will take place with secured funding.

“A CPT benchmark covered bond is almost certainly part of this.”

Joost Beaumont, senior fixed income strategist, noted that the last CPT benchmark from NIBC, a Eu500m August 2019 issue sold at 33bp over mid-swaps in March 2014 trades at mid-swaps minus 8bp. NIBC is rated BBB- by S&P.

Van Lanschot is in blackout ahead of announcing its results on Tuesday (10 March).