Prospects for supply in the coming days were said to be good by syndicate officials this (Monday) morning, even if the week got off to a quiet start following weak US employment data on Friday. LF Hypotek and Westpac NZ were among those cited as issuance candidates.

Länsförsäkringar

With many in continental Europe off on Friday when US non-farm payrolls were released, market participants were said to be digesting the news – as well as the latest developments in Greece and Portugal – today.

“It seems relatively quiet,” said one syndicate official. “The market is not in fantastic shape. Because of the non-farms people are a bit more cautious.

“But we’ve got a full week this week,” he added, “so there will be something.”

The main macro event this week is the press conference of the governing council of the European Central Bank on Thursday. However, a covered bond banker said that dealers could still be nervous about unexpected bad news being thrown up.

“There are so many things that can surface and cause the market problems these days that, while investors might not be risk averse, lead managers may be cautious about going out with deals,” he said.

Länsförsäkringar Hypotek finished a roadshow last week and leads HSBC, Natixis, Nordea, UBS and UniCredit are said to be looking at launching a new issue for the Swedish bank this week. DnB Nor Boligkreditt was mentioned as another candidate from the Nordic region, with a 10 year.

Westpac NZ postponed a debut transaction in February, but is understood to be looking to enter the market, possibly as early as this week. The bank had mandated Barclays Capital, BNP Paribas and UBS to work with it before poor market conditions and an earthquake in New Zealand prompted it to hold off earlier in the year. The New Zealand bank was previously considering a five year and is said to be targeting the same maturity.

“I heard about Westpac looking to pull the trigger,” said a banker away from the leads, “and I personally don’t see any reason for them to wait.”

UniCredit was said to be considering a seven year obbligazioni bancarie garantite issue, which would be the first new benchmark covered bond from Italy since Banca Monte dei Paschi di Siena sold a Eu1.25bn five year at 180bp over mid-swaps on 9 March. The German arm of the UniCredit group last week sold a Eu1bn five year Pfandbrief at 19bp over mid-swaps.

While UniCredit is one of the strongest names from a peripheral jurisdiction, syndicate officials were in general sceptical about the amount of demand others from such countries might face.

“The market is still open for core names,” said one, “but I doubt peripherals could get much done. Santander was not a great success last week.”

Others were more hopeful.

“I’m actually a lot more optimistic than other people,” said another syndicate official. “We’ve had the Portuguese elections, which are viewed as positive, and there’s some news on Greece, which seems to be moving in the right direction.

“If issuers come to the market with the right price, I think they would do rather well.”