Sampo Housing Loan Bank will price a Eu1bn 10 year covered bond at the wide end of guidance this (Tuesday) afternoon, as the primary market got off to a slow start after holidays yesterday. But Aktia Real Estate Mortgage Bank is taking IoIs and further issuance is expected this week.

The market backdrop was more positive today compared with yesterday (Monday), but still shaky, said covered bond bankers.

“Basically, we are stabilising at low levels,” said a syndicate official.

Another syndicate official suggested the market had been a bit quieter because of a downgrade of Greece. Standard & Poor’s yesterday downgraded the sovereign’s long term credit rating to triple-C.

Icebreaker Sampo (although unrelated to Sampo Bank)

Against this backdrop, Finland’s Sampo launched a Eu1bn no-grow 10 year with guidance of 55bp-57bp over mid-swaps. Leads Danske, HSBC, Natixis, Société Générale and UniCredit began taking indications of interest this morning and opened books officially at 1130 CET.

Sampo’s book had topped Eu1bn as The Covered Bond Report went to press. The deal will be priced at 57bp over mid-swaps this afternoon.

“We are happy because we were able to continue the process from taking IoIs to officially opening books,” said a syndicate official at one of the leads.

A syndicate official away from the leads said he thought Sampo would be a nice trade.

“This is what investors are looking for: Scandinavian names,” he said. “Germany and France will be key takers on an issue like this.”

Another banker away from the leads said the Sampo trade was a good sign for core issuers.

“Sampo is opening books, which means the cash is there,” he said. “The appetite is still there for tier one core region issuers.”

Aktia is now taking IoIs on a Eu500m five year, for which books will be officially opened tomorrow. The issuer finished its roadshow last week with leads Crédit Agricole, JP Morgan, Nykredit and UniCredit.

A syndicate official away from the leads said that he had heard a whisper of the low 50s over mid-swaps, which he considered generous, even if Aktia’s covered bonds are rated Aa1 and the deal is set to be for Eu500m.

“I deem this slightly wide,” he said. “I don’t think you need a pick-up of 20bp versus the other Finnish issuers, which I’d put at around 30bp in five years.”

ING-DiBa is completing a roadshow with leads Commerzbank, HSBC, ING and UniCredit this week. Market participants believe the issuer could hit screens next week.

Clydesdale Bank and ANZ National are also candidates, having been on roadshows last week. A banker suggested that ANZ’s plans could have been affected by a new earthquake in New Zealand on Monday; Westpac NZ issued a debut covered bond last week after postponing its initial plans in February in the wake of a previous earthquake.

CM-CIC and Banca Carige are also prospects for this week, said a syndicate official.

“I think if there is a possibility to do something, people will do it,” he said.