Barclays Bank is aiming to add a minimum of Eu250m to each of September 2014 and March 2022 issues today (Monday). Meanwhile, the European Central Bank’s second covered bond purchase programme has breached Eu2bn, or 5% of its Eu40bn target.

Lead manager Barclays Capital set guidance at the 105bp over area on the 2014 and 130bp over on the 2022.

Syndicate officials away from the lead said that it was a sensible move, but doubted the final sizes would be much more than Eu250m because spreads were still under pressure today in spite of an agreement at an EU summit on Thursday aimed at resolving the euro-zone crisis.

“It seems that market participants are not really that convinced of any solutions,” said a banker.

A syndicate official away from the taps said the issuer was paying a new issue premium of about 10bp.

“They should do well,” he said. “But I don’t expect they will do much more than Eu250m.

“That being said, it would be a really good surprise for the market if either the 2014 or 2022 could reach more than Eu500m.”

He added that the last time some a tap had emerged the strength of demand had surprised him. The last tap was a Caisse de Refinancement de l’Habitat January 2022 tap on 1 December at 150bp over that reached Eu850m

Another syndicate official also had modest expectations.

“I would imagine they had some demand before launching,” he said. “But I can’t imagine they will be much more than Eu250m each.

“Many investors are done for the year.”

Another banker suggested that Barclays’ taps could tease out further incremental supply before year-end.

“If it goes well this may prompt some other issuers to look at the market for a possible tap,” he said. “But the majority of issuers are waiting until 2012.”

The European Central Bank reported a Eu225m increase in purchases under its second covered bond purchase programme today, taking the total to Eu2.069bn. The increase, reflecting buying that had settled by Friday, is the fourth largest and coincides with the settlement of CRH’s Eu850m tap. Central banks were allocated 29% (Eu246.5m) of it, although that included some buying by non-Eurosystem institutions.

According to RBS analysts, CBPP2 is Eu2.25bn behind a theoretical run-rate of Eu160m per day necesssary to hit the Eu40bn total when the programme ends in October 2012.