WL Bank is lining up a Eu1bn five year mortgage backed covered bond via leads Barclays, BayernLB, Deutsche Bank, DZ Bank, WGZ Bank and NordLB that is expected to emerge tomorrow (Wednesday) alongside a Dexia Municipal Agency benchmark.

The Westfälische Landschaft Bodenkreditbank mandate was announced this (Tuesday) morning, after the French issuer went public with the only other official announcement of this week yesterday (Monday).

“I expect we’ll start it later in the afternoon,” said a syndicate official at one of WL Bank’s leads. “But as of now, there have been no indications of interest and no whispering.”

The last five year Pfandbrief benchmark was a Eu1bn public sector backed issue for Landesbank Hessen-Thüringen in mid-April, which was priced at 10bp over mid-swaps. A syndicate official at one of WL’s leads said that this had tightened to around 2bp over.

“People are going to love it,” he said. “The only question is how much international participation there will be.”

Dexia Municipal Agency is expected to go ahead with a five year via Dexia Capital Markets, ING, Morgan Stanley, Natixis and Nomura tomorrow morning after first quarter results for the group are announced. A syndicate banker away from the leads said that, with Dexia MA’s September 2016s bid at around 87bp-88bp over, he expected a spread in the low to mid-90s, but had not heard any official price talk.

“It will really come down to how the market behaves tomorrow,” he said.

The market has recovered a bit from the weekend’s rumours about Greece, said market participants, with its government bonds and credit default swaps having tightened.

“It’s not as good as last week, but it certainly feels better than yesterday,” said a banker.

Another syndicate official felt that any impact from Greece would be felt further down the line.

“The covered bond market is not doing that badly at the moment”, he said, “but if they don’t find a solution with Greece, we could see an impact.”

The pipeline was largely empty, though bankers speculated about possible issuers from the Nordic region or France, or even Spain – although others were more sceptical about the latter.