Novobanco raises €500 million from covered bonds

Novobanco has raised €500 million by issuing covered bonds with a four year maturity with an annual coupon of 2.5% the bank announced on Tuesday.

In a communiqué sent to the market, the bank headed by Mark Bourke said that the transaction would enable it to “diversify and enhance its sources of financing”.

The final allocation involved a diverse investor base from different countries, including Germany, Austria and Switzerland (32%) and Scandinavian countries (28%) the note sent to the Portuguese securities market watchdog CMVM stated.

The bond issue was also snapped up mostly by institutional investors such as asset management companies (40%) and governments and government agencies. (35%)

The bonds are covered by a number of assets such as mortgages which allow banks to bolster their financing capacity.

The bank is expected to press ahead with a stock market floatation in the coming months despite the uncertainty over tariffs from the United States.