CBs: no deals but plenty of developments: The AAA Investor

Research evidence excerpt

CBs: no deals but plenty of developments: The AAA Investor

FICC Research

Credit Strategy

29 July 2026

The AAA Investor

CBs: no deals but plenty of

developments

Despite a lull in EUR covered bond issuance since 1 July, the Cristina Costa

sector continues to generate headlines. We discuss TSB +33 (0) 1 44583195

cristina.costa@barclays.com

covered bonds, the OTP-Luminor merger, a potential new BBI, Paris

Luxembourg issuer and Agence France Locale's CB issuance

intentions.

TSB covered bond programme

Santander UK completed its acquisition of TSB on 30 April

As outlined here, Santander UK completed its acquisition of TSB Bank plc on 30 April 2026,

following regulatory approval from the Prudential Regulation Authority and the European

Central Bank on 19 March 2026 and 14 April 2026, respectively. The all-cash £2.65bn transaction

will increase Santander UK's return on tangible equity and make Santander UK the third largest

bank in the UK by personal current account balances, and number four in mortgages.

Both TSB and Santander UK have covered bond programmes

• Both TSB Bank plc and Santander UK plc have regulated UK covered bond programmes, as

listed here.

• Santander UK issued covered bonds out of its €35bn regulated covered bond programme.

They are rated AAA by Moody's/S&P/Fitch. On 27 July, Fitch affirmed Santander UK's

mortgage CBs at AAA, based on SANUK's AA- long-term issuer default rating and eight notches

of uplift granted to the programme (ie, one notch of resolution uplift, six notches of payment

continuity uplift and one notch of recovery uplift. The stable outlook reflects a five-notch

buffer against a downgrade of the bank. As of end-March 2026, Santander UK had £30.77bn of

covered bonds outstanding backed by £32.56bn of cover assets. The issuer documentation