Crédit Mutuel-CIC Home Loan SFH returned with a Eu400m tap after debuting its obligations à l’habitat on Tuesday, but new issue hopes were reined in amid renewed volatility that hit Italian bonds and stocks hardest today (Friday), although Hungary’s OTP is planning a roadshow.

Shares in UniCredit were suspended this morning as Italian government bonds widened, but by lunchtime trading in the Italian bank had resumed and its shares were off the day’s lows, while BTPs were also inside their wides. The country’s stocks and debt have increasingly come under pressure as, after a Moody’s downgrade of Portugal to junk, attention has shifted not to Spain but Italy.

More Italian issuers are understood to have been keen to tap the covered bond market since UniCredit and Credito Emiliano issued benchmarks a month ago, but have been frustrated in their efforts, and syndicate officials today said that they may remain shut out for the time being.

The likelihood of other supply could be influenced by non-farm payroll figures due from the US today, with bankers suggesting that a surprise to the upside and consequent rise in yields could pave the way for issuance, particularly in dollars. Korea Housing Finance Corporation has been marketing ahead of a planned dollar benchmark, while Germany’s Münchener Hypothekenbank and NordLB have been eyeing the US market as well – although one market participant raised a question mark over the Landesbank’s project given that Bayerische Landesbank delayed a planned 10 year euro deal this week when Moody’s put its Pfandbriefe on review for downgrade.

There was little clarity over any potential euro supply next week, although Crédit Mutuel-CIC added Eu400m to a January 2023 benchmark today. Natixis and Nomura built a Eu540m book for the tap at a level of 70bp over mid-swaps.

“We’ve had good demand for long dated assets from French and German insurance companies,” said a syndicate official at one of the leads.

CM-CIC on Tuesday launched its first benchmark covered bond since converting its programme to comply with the new French obligations à l’habitat framework, a Eu1.5bn five year issue priced at 58bp over mid-swaps.

Hungary’s OTP Mortgage Bank is understood to have mandated BNP Paribas, Citi and Morgan Stanley to roadshow a covered bond issue, with investor meetings expected to start next week.