The benchmark covered bond market was quiet this (Friday) morning, with only Caisse de Refinancement de l’Habitat accessing the market, for a Eu400m tap, although Canadian Imperial Bank of Commerce earlier launched an A$700m (Eu508m) five year deal.

The market was said to be calm in the face of the Japanese tsunami and earthquake, as well as a variety of negative macroeconomic factors that have emerged this week. A market participant said that Spanish and Italian government bonds, for example, were better bid, and covered bonds only marginally better offered in the secondary market.

This could allow for follow-ups to this week’s Unicaja transaction, he suggested.

“Two year Spain seems to be tighter versus Bunds,” he said. “I know not everyone’s as bullish as me on the prospects for the market, but as long as the world doesn’t end over the weekend then we could see something on Monday.”

Indeed some market participants were more bearish.

“I would assume that the second or third rank Spanish names are still wanting to come,” said one investor, “but the market has looked shakier today, even if it was not that shaken yesterday by the Spain downgrade. And the market doesn’t really believe in the Eu15bn number given by the Bank of Spain for recapitalisation of the banking system – their initial guestimate was Eu20bn and they were hardly going to come out with a much larger number, but other estimates were well higher than this.

“We would like to wait for the outcome of the EU discussions – ideally those at the end of March, too. The question for issuers, I guess, is whether to come ahead of those or not.”

Banesto and Caja Madrid were two Spanish banks cited as candidates for approaching the market.

Away from the periphery names including Compagnie de Financement Foncier and Crédit Mutuel Arkéa were cited as possible issuers. CM-CIC Covered Bonds launched the first French issue since mid-February this week, a Eu1.5bn 10 year deal, and Sandy Faure, senior dealer, long term funding, said that the issuer was pleased with the result.

“It was a quick and successful transaction,” she said. “The spread was OK and the execution was very good.

“We didn’t take any indications of interest beforehand as we were confident about the evolution of the rate outlook. The Trichet speech last week was helpful in the launch of this transaction as we could capture investors’ interest in the long end.”

Crédit Agricole, HSBC and Société Générale increased CRH’s 4.25% October 2014 deal at 32bp over mid-swaps, after having gone out with guidance of 32bp-33bp over.

Canadian Imperial Bank of Commerce today sold its second Australian dollar covered bond, a A$700m five year deal priced at 74bp over swaps, through leads CBA, CIBC, HSBC and UBS.