Finland’s Sampo Housing Loan Bank will price this week’s fourth euro benchmark covered bond later today (Wednesday), a Eu1bn maximum five year issue that a syndicate official away from the leads described as a defensive trade.

Leads BNP Paribas, Danske Bank, Royal Bank of Scotland, UBS and UniCredit launched the deal this morning with guidance set at the 67bp over area and the size capped at Eu1bn.

The spread is fixed at 66bp, with order books closed and “comfortably” in excess of Eu1bn, according to a syndicate banker on the deal.

More than 60 accounts participated, according to an update from one of the leads.

The transaction is Sampo’s second euro benchmark this year, after it sold a Eu1bn 10 year at 57bp over mid-swaps in June.

A syndicate official away from the leads said the trade was defensive, coming around 5bp-8bp “too cheap”.

“But it’s still a buyer’s market,” he said, adding that the issuer will have wanted to “play it safe” and that the leads did not take an aggressive approach.

He said that a December 2015 issue was trading at around 50bp on the bid side, with another 5bp for the curve extension amounting to fair value at 55bp and a new issue premium of around 10bp leading to a spread of 65bp as “the highest level you should pay”.

Another syndicate banker away from the deal said that the transaction seemed to be going well, but that he was somewhat surprised by the spread because it showed Sampo paying more than DnB Nor.

DnB Nor Boligkreditt yesterday (Tuesday) sold a Eu2bn five year Norwegian covered bond at 58bp over, following guidance of the 60bp over area and then 58bp-60bp.

The syndicate official said that he would not have expected Sampo to pay such a pick-up over DnB Nor, with Sampo’s cover pool of Finnish residential mortgages as good as or better than DnB Nor’s.

However, he suggested that the level for Sampo’s deal may have also been set to reflect difficulties in the Danish banking system, home to Sampo’s parent, Danske Bank.