HSBC could re-enter the UK covered bond market via its HSBC UK Bank after several years’ hiatus, having recently incorporated entities related to its ring-fenced bank that are typical of UK programmes, while its Canadian arm is considering issuing a euro benchmark next year.

HSBC UK Covered Bonds (Holdings) Ltd was incorporated in April, and HSBC UK Covered Bonds LLP and HSBC UK Covered Bonds (LM) Ltd were incorporated in June.

HSBC did not respond to enquiries by The CBR’s deadline.

The group previously issued UK Regulated Covered Bonds via HSBC Bank plc before the ring-fenced HSBC UK Bank plc was established.

HSBC’s last benchmark UK covered bond was a $1.25bn (£944m, €1.06bn) three year US dollar debut in 2011. Its last outstanding covered bond, a ¥10bn (£7m, €8m) 10 year Japanese yen issue, matured in July 2017, and the programme was thereafter no longer included in the Financial Conduct Authority’s Regulated Covered Bonds Register.

As well as selling benchmarks in euros and dollars, and issuing in Swiss francs and yen, the old programme was used for retained sterling issuance.

HSBC’s move comes as public UK covered bond issuance has receded since the onset of the crisis and ahead of the end of the Brexit transition period, on the back of renewed funding options from the Bank of England, notably the Term Funding Scheme with additional incentives for SMEs (TFSME). The only benchmark UK covered bond issuance since February has been a €500m seven year benchmark for Yorkshire Building Society on 6 October, while other issuers have bought back covered bonds.

The HSBC group currently issues covered bonds out of Canada, via HSBC Bank Canada, and France, via HSBC SFH (France).

Marty Halpin, head of balance sheet management for HSBC Bank Canada, last week told Bloomberg that the issuer could launch its first benchmark in euros next year. It has so far only issued benchmarks internationally in US dollars, most recently a $1bn (C$1.3bn) three year in May.

Last month HSBC Bank Canada joined the Covered Bond Label.