French banking group BNP Paribas has launched its E25 million covered bonds program, enabling the bank to raise funding secured on its portfolio of home loans.
The program is designed to crate a diversification of its funding sources through issuing both a benchmark and private placement transactions while taking advantage of the attractive cost of funds available in the covered bond market.
The addition of a covered bond program to our existing capital markets issuance programs will allow investors an ever greater opportunity to purchase obligations linked to specific assets originated by BNP Paribas, commented Michel Eydoux, head of ALM and treasury at BNP Paribas. Investors now have the option to purchase senior and subordinated unsecured obligations of the bank as well as obligations linked to our consumer credit, corporate lending, leverage finance and home loan portfolios.
The finance unit is expected to issue several benchmark covered bonds each year with the intention of creating a liquid benchmark curve over the coming years.
Covered bonds issued under the program will be rated AAA by Standard & Poor’s Rating Services, AAA by Moody’s Investors Service and AAA by Fitch Ratings.