France’s Caisse de Refinancement de l’Habitat and the UK’s Barclays Bank successfully reopened their respective jurisdictions today (Tuesday) with benchmark covered bonds, as the market picked up where it left off last week, with deals for Swedbank Hypotek and Erste Group Bank, too.

A portfolio manager said that the deals in the market this morning seemed attractive, coming with a pick-up over secondary market levels. However, he wondered whether the new issue premiums would – as he said was the case following deals for ING Bank and Nordea Bank Finland last week – lead to a widening of spreads on comparable outstanding bonds in the secondary market. The new issue premiums being paid were helping deals perform in the secondary market, he said, but the widening on outstanding issues meant that spreads were “meeting somewhere in the middle”.

Caisse de Refinancement de l’Habitat launched a 10 year benchmark this morning at guidance of the 85bp over mid-swaps area via leads Barclays Capital, Crédit Agricole, Landesbank Baden-Württemberg, Natixis and Société Générale. Orders were “well above” Eu1bn by the time The Covered Bond Report went to press, with very good momentum in the order book, according to syndicate official at one of the leads.

Market participants were watching the deal keenly, given that it is the first French new issue since 5 July, when CM-CIC Home Loan SFH sold a Eu1.5bn five year at 58bp over mid-swaps.

“CRH is the most exciting,” said a banker away from the leads. “The 85bp area is exactly where we would have put it.”

Another syndicate official away from the deal said that it would be interesting to see what size the French transaction reaches, and that the new issue was “a significant test of the French market”.

But the domestic investor base would help carry the transaction, he added.

Another syndicate official away from the leads said he had not expected the transaction out of France.

“The big surprise today is that the French market is back in business,” he said. “I heard books are developing well on the CRH, which means it will definitely be one billion, or it could be more.”

Barclays Bank hit the market with a three year benchmark with guidance of the 52bp over area. Banca IMI, Banco Bilbao Vizcaya Argentaria, Barclays, BNP Paribas, Citigroup and Danske Bank are lead managing the transaction.

A syndicate banker on the deal said that orders totalled at least Eu1.9bn. Order books were due to have been closed by the time The Covered Bond Report went to press.

“It’s a very good book, with around 100 accounts and a very good split in terms of geography,” he said.

A syndicate banker away from the leads said it was positive to see a national champion reopening the UK market.

“I expect further UK mandates to come to the market this week – also in euros,” he added.

HSBC was the last UK issuer to sell a benchmark covered bond, a $1.25bn three year that was priced on 28 June, while Barclays sold a Eu1.5bn five year at 58bp over mid-swaps on 6 April. Two UK sterling covered bonds were priced between these dates.

A week after tapping the US dollar market with a $1bn five year deal, Swedbank Mortgage entered the euro market this morning with a four year benchmark. Leads Bank of America Merrill Lynch, BNP Paribas, Deutsche Bank, Swedbank and UBS were marketing it at the 47bp over mid-swaps area, and had gathered orders in excess of Eu1bn by 1100 CET, according to a syndicate banker on the deal.

A syndicate official away from the leads suggested that Swedbank may have decided to come to market after seeing the execution of a Nordea Bank Finland transaction on Friday (see below for more on Nordea’s issue).

“I think they decided to follow because the Nordea deal went very well last week,” he said.

He suggested that Swedbank could perhaps have come tighter.

Market participants compared the level on Swedbank’s euro transaction with a re-offer spread of 82bp over mid-swaps on the issuer’s dollar.

“It is close together with the dollar deal,” said a syndicate official away from the leads, “but Yankee investors are completely different to euro investors.”

Another syndicate banker said that today’s euro benchmark showed that the dollar market does not necessarily offer as attractive arbitrage as it has at times. He said that the dollar’s re-offer spread of 82bp was equivalent to around 43bp-45bp in euros, with today’s euro deal at only a slightly wider spread, albeit in a shorter maturity.

“You’re saving a couple of basis points in dollars, but not 10,” he said.

Another syndicate official put the equivalent euro level of Swedbank’s dollar deal at 42bp over mid-swaps.

Austria’s Erste Bank is in the market with its second benchmark of the year, a seven year issue that is likely to be sized at between Eu500m and Eu750m, according to a syndicate banker at one of the leads – BNP Paribas, Erste Group, HSBC, RBI and UBS.

Order books were due to be closed by the time The Covered Bond Report went to press, with more than Eu700m of orders having been gathered and pricing fixed at 55bp over, the middle of guidance of the 55bp over area. The issue size has been capped at Eu750m, according to a syndicate banker on the deal.

He said that he was “pretty happy” with the transaction, and that seven years was a tough maturity, particularly as the deal was in the market at the same time as Barclays, which was getting investors’ attention because of its shorter, defensive maturity and anticipated benchmark size.

A syndicate official away from the leads said the trade was expected to be driven by a bid from the German speaking area of Europe.

Nordea Bank Finland on Friday sold the first Nordic euro benchmark covered bond since the reopening of the primary market, a Eu1.5bn five year that was reoffered at 40bp over mid-swaps, the tight end of guidance of 40bp-42bp over

Leads Bank of America Merrill Lynch, BNP Paribas, Deutsche Bank and Nordea collected Eu1.77bn of orders from 86 accounts, according to a syndicate banker at one of the bookrunners.

“The granularity of the book was reflected by the fact that there were only three orders above Eu100m,” he said.

German demand drove the transaction, accounting for 40%, followed by the Nordic area with 22%, Asia Pacific 11%, the Benelux 10%, Austria 5%, Switzerland 4%, France 3%, eastern Europe 2%, the UK 2%, and others 1%. Banks were allocated 40%, SSAs and central banks 24%, asset managers 22%, pension funds 8%, corporates 4%, and others 2%.