Encouraging macroeconomic news caused a slight upswing in the market today (Friday) as peripheral spreads tightened, and market participants were hopeful that next week some covered bonds in the pipeline could come to market in euros and dollars.

“Today is very positive,” said a covered bond banker. “Let’s hope nothing happens over the weekend.

“We should see one or two deals come to market next week.”

An International Energy Authority decision to release 60m barrels of oil, which eased oil prices, and news late yesterday (Thursday) that Greece, the European Union and the International Monetary Fund had come to a consensus on a Greek package of austerity cuts and the release of more aid for Greece, eased market conditions.

A syndicate official said that there had been some concerns around Italy after Moody’s placed the ratings of 16 Italian banks on review for possible downgrade yesterday. The Republic of Italy’s Aa2 rating was placed on review for possible downgrade last Friday (17 June).

“The market was looking OK but there seems to be a lot of noise around Italy after Moody’s rating action,” said the syndicate official.

HSBC mandated BNP Paribas, HSBC, RBS and Société Générale for a dollar deal yesterday and is planning a roadshow. A banker away from the leads said they would be doing a net roadshow.

“That’s a good way for them to broaden the investor base,” he said, “because they can’t go and meet with investors in every region.”

HSBC has just modified the terms of its UK covered bonds to remove the possibility of issuing residential mortgage backed securities (RMBS) out of the same programme, drop Standard & Poor’s, and change the composition by mortgage type.

CM-CIC was considered a candidate for a long dated covered bond after having set up an SFH under France’s new obligations à l’habitat legislation.

“ING-DiBa did extremely well,” said a syndicate official. “Markets will remain choppy but investors still need to buy and they need to buy quality, which is why these core deals go well.”

Clydesdale Bank was another issuer cited as a potential issuer after having recently finished a roadshow.