Market participants expressed confidence in the outlook for supply today (Friday) as Finland’s OP Mortgage Bank and France’s BNP Paribas Home Loan SFH launched new euro covered bonds.

“When you see a window you have to take it, even if it’s a Friday,” said a covered bond banker. “The market could always get worse – thought I don’t think it will.”

Another syndicate official away from the two deals said today’s activity was a sign of recovery.

“The correction to the market is continuing,” he said, “so it’s not so much of a dead cat bounce. Things will continue to punch on in the core markets.”

OP Mortgage Bank was in the market with a Eu1bn no-grow seven year at the 48bp area, after mandating leads Barclays Capital, BNP Paribas, HSBC, Pohjola and UBS.

“I heard it was not going especially well,” said a syndicate official away from the leads, “and that the feedback yesterday was average. I think they’ll get the billion done but it’s not going to be a flyer.

“I’m a bit surprised, to be honest, because it’s a great name, it’s very attractive, and the market backdrop is positive.”

Another banker away from the leads suggested the OP trade had suffered because BNP Paribas was in the market.

“I believe OP was a little bit overwhelmed by BNP, which has a 4% yield that is always eye-catching to insurance companies,” he said. “OP should have gone very well, but it’s also a Friday and a light market.”

BNP Paribas Home Loan SFH is pricing a Eu2bn 10 year at 61bp over mid-swaps. Leads BNP Paribas, Danske Bank, Natixis and RBS fixed it at the tight end of guidance of the 63bp area.

The books closed with orders in excess of Eu2.75bn.

“Guys like BNP, CRH will now definitely be showing a 4% level,” said a banker away from the leads. “I’m a big fan of these 10-12 year deals.”

Caisse de Refinancement de l’Habitat priced a Eu1bn tap of a Eu1bn September 2022 issue at 64bp over mid-swaps yesterday (Thursday) through Barclays, BNP Paribas, HSBC and Natixis. The resurgence in supply followed the Greek parliament’s approval of a new package of austerity measures on Wednesday.

Henry Raymond, chairman and chief executive of CRH, told The Covered Bond Report that he had been awaiting the right window to issue.

“It has been a very difficult market, so it was very useful to be careful and ready to go ahead with a deal if possible,” he said. “The actual trigger was the Greek vote – some investors are cash rich, but were reluctant to invest ahead of that.

“But to be honest, before opening the book I believed it would only have been possible to raise Eu400m or Eu500m,” he added, “so I was happily surprised by the Eu1bn amount.”

Next week’s pipeline is well filled, according to market participants.

“I think we’ll see a couple dollar deals and some more core issuers next week,” said a banker.

Another syndicate official said he expected a bit of a rush next week.

“I think a few guys are looking at the market for next week,” he said. “We’ll see strong supply, maybe some from the Nordics before they go on holiday proper.”

Clydesdale Bank is considered a candidate after having recently roadshowed.