The Co-operative Bank is buying back some £117m of its sole outstanding covered bond, it announced today (Friday), while Hamburg Commercial Bank is running its third tender of the year, for three benchmarks, including a public sector Pfandbrief that lost its rating last month.

The Co-op launched the any-and-all tender for its £600m 4.75% November 2021 issue on Thursday of last week (24 September) and today announced that it is accepting the £116.893m of bonds tendered by the offer’s close yesterday (Thursday), equivalent to 19% of the bond. The purchase spread had been set at 75bp over the Gilt.

Hamburg Commercial Bank (HCOB, formerly HSH Nordbank) launched its third bond tender of the year on Tuesday, following earlier exercises in April and June where it bought back in aggregate €274.8m of three bonds. The latest tender runs until Tuesday.

Two issues are subject to any-and-all offers: a 0.125% February 2021 public sector Pfandbrief (DE000HSH5YK0) with €339.812m outstanding, and a €500m 0.75% October 2021 mortgage Pfandbrief (DE000HSH4UX4). HCOB is tendering for up to €259.529m of a 0.375% April 2023 mortgage Pfandbrief (DE000HSH5Y29) of which €759.529m is outstanding, thereby ensuring it remains at €500m-plus after the exercise.

The public sector Pfandbrief was the subject of the April HCOB tender, when €61.575m was bought back.

“The ÖPfe (Öffentlicher Pfandbrief) program plays a fairly minor role in HCOB’s strategy,” said LBBW senior investment strategist Karsten Rühlmann, “which explains why the Moody’s rating for this programme (most recently Aa2) was eliminated in mid-September. Given that change, we believe investors of this bond might want to consider participating in the tender operation if they are required to hold rated bonds.”

HCOB bought back €90.471m of the April 2023 mortgage Pfandbrief in June, although Commerzbank analysts noted that it remains the issuer’s largest benchmark.

“According to our data,” they added, “the bond was quoted at around 3bp over swaps the day before the tender offer was announced. The issuer is now offering a spread of minus 2bp, which we therefore consider attractive.”

The repurchase prices for the February 2021 and October 2021 issues are €1,002.40 and €1,012.49 per €1,000, respectively.