Nordea Bank Finland launched a five year issue this (Friday) morning, taking benchmark covered bond supply in euros for the week towards Eu6bn and auguring well for a renewed wave of issuance next week.

Leads Bank of America Merrill Lynch, BNP Paribas, Deutsche Bank and Nordea Markets had built a book of Eu1.5bn by 1100 CET based on initial guidance of 40bp-42bp over mid-swaps.

“I’m very bullish regarding this transaction,” said a syndicate official away from the leads. “This is what issuers are looking for – a good trade, which is well priced.

“I’m very positive this will be a Eu1.5bn transaction.”

Market participants said that pricing was fair.

“I think the pricing is good,” said a banker away from the leads. “At another time Nordea might have been in the 30s, but in the current market a higher new issue premium is understandable.”

Another suggested that the guidance had been designed with size in mind, saying that it implied a new issue premium of some 10bp, whereas Switzerland’s UBS, for example, had paid only around 5bp yesterday (Thursday) for an April 2015 issue.

“Maybe they are aiming for size,” said the syndicate official. “When ING paid a new issue premium of 15bp for its 10 year on Wednesday, I think that had something to do with the Eu1.75bn they ended up with.

This transaction is Nordea Bank Finland’s fourth since November 2010 with the last issue having been a Eu3bn three year at 19bp over in May.

Ahead of today’s deal, supply had reached Eu4.75bn through four benchmarks on Wednesday and Thursday – as well as a $1bn dollar benchmark for Swedbank mortgage on Wednesday.

“This is a very encouraging sign as despite the ongoing sovereign debt woes, market participants appear to have affordable access to term funding,” said Leef Dierks, head of covered bond and SSA strategy at Morgan Stanley. “Furthermore, the reopening of the market reduces the pressure on tapping the market in September, which for seasonal reasons, usually is among the busiest months.

“So far, investors’ appetite appears to remain sound.”

Covered bond bankers were hopeful for further supply next week, with many issuers in the pipeline and on roadshows.

“If next week is open, I imagine we’ll see something out of the UK or France,” said a syndicate official. “I wouldn’t be surprised if, for example, Crédit Agricole came to the market.

“They have – so far in the market – always been willing to pay a fair new issuer premium.”

Another syndicate official said Crédit Agricole would be an interesting possibility. Heavy French covered bond supply this year and the volatility that hit French bank shares earlier this month have led to much discussion about where a new French benchmark would be priced and how it would be received.

A banker at one of the leads for a Raiffeisen Landesbank Steiermark roadshow said the Austrian issuer could possibly launch its debut next week pending market conditions.

“There are many roadshows,” said a banker, “but we don’t know for sure of any new projects next week.”

Deutsche Pfandbriefbank (pbb) has joined those banks working on marketing ahead of potential new issues. It has mandated Citi, Commerzbank, Credit Suisse, Deutsche Bank and UniCredit for a two week roadshow starting in a week’s time ahead of a planned euro issue.