Faced with a short week, BNP Paribas, Santander and UniCredit Bank AG launched benchmark covered bonds this (Tuesday) morning after Deutsche Kreditbank (DKB) raised Eu500m yesterday. And more is to come, with Crédit Agricole expected tomorrow (Wednesday).

Santander

Santander hit screens today with a five year cédulas territoriales benchmark, backed by public sector debt, at the 195bp over mid-swaps area, via leads Commerzbank, HSBC, Santander, and Société Générale. The last Spanish benchmark was a Eu1.25bn five year La Caixa cédulas hipotecarias at 195bp over mid-swaps on 12 April.

“I’m not overly keen on the Santander,” said a syndicate official away from the leads. “It seems a little bit on the aggressive side.

“Santander looks quite tight compared to where the government is trading.”

Another syndicate official away from the leads pointed out that it was about 10bp back from where government bonds were trading.

“Santander is being very aggressive on this part of the curve,” he said.

However, another banker away from the leads said that it seemed cheap relative to Santander’s mortgage backed cédulas hipotecarias, which he saw in the 170s over.

“OK, Spanish local authorities as collateral aren’t great,” he said, “but are Spanish mortgages really any better?”

He added that Santander CDS trade through Spain’s, so pricing 10bp-15bp wide of Bonos should not have been a problem.

Another banker away from the leads called the Santander “the most interesting to watch”.

BNP Paribas Public Sector SCF launched a Eu1bn five year obligations foncières benchmark at 33bp over mid-swaps, through leads BBVA, BNP Paribas, Commerzbank and NordLB.

The price was tightened to 33bp over from an initial price of 33bp over mid-swaps area and a whisper of the mid to high 30s.

“As far as I know, it was a smooth process,” said a syndicate official away from the leads.

The books were opened at 0900 GMT and closed at 1000 GMT, with Eu2bn in orders having been placed.

Another banker away from the leads said it was “executed quite well”, and was probably the best deal of the day.

UniCredit is pricing its Eu1bn five year public sector Pfandbrief at 19bp over mid-swaps. The pricing was tightened to 19bp over mid-swaps from initial guidance of 20bp over.

Joint leads Crédit Agricole, BayernLB, ING, UniCredit and NordLB built a book in excess of Eu1.6bn over the course of the hour and 40 minutes for which the books were open.

A syndicate official at another of the leads said the deal went very well.

“It was domestically driven,” he said, “though there were some non-German speaking countries involved.”

Crédit Agricole has mandated BBVA, Crédit Agricole, RBS, Société Générale and UniCredit for its seven year benchmark. The issuer is understood to have gone out with a whisper for the mid to high 50s and focussed on building a good level of indications of interest today.

“As usual, it will be a two day process,” said a syndicate official from one of the leads. “Official bookbuilding will proceed tomorrow.”

A banker away from the leads noted that it is the first seven year issue for some time.

ING DiBa has mandated Commerzbank, HSBC, ING and UniCredit to roadshow a new mortgage Pfandbriefe programme. An inaugural trade should follow, pending market conditions.

DKB launched its Eu500m three year public sector Pfandbrief at 16bp over mid-swaps yesterday (Monday), during the UK bank holiday, via leads Bayerische Landesbank, Commerzbank, DZ Bank and UniCredit.

“There was no UK involvement because of the holiday,” said a syndicate official from one of the leads.

“As it’s a national name, we tried to place it with German investors,” he added.

Germany took 99% of the trade and Switzerland 1%. Banks were allocated 46%, Landesbanks and savings banks 32%, asset managers 21%, and corporations 2%.

The syndicate banker said it went very well, but described it as an “unspectacular” transaction.

He said the pricing was somewhere between DKB’s curve and Eurohypo, adding that DKB traded better than Eurohypo. Eurohypo priced a May 2014 mortgage Pfandbrief at 33bp over mid-swaps two weeks ago. Pricing comparables also included a BayernLB June 2014 at minus 3bp, added the syndicate banker.